Compare a lottery jackpot as an annuity versus a lump sum, after tax — clearly labelled as an estimate.
Estimate only: the cash-option share and the tax rate vary by lottery and by state, and real annuities often rise each year rather than paying equal instalments.
lump sum after tax
How to use this tool
Type the advertised jackpot — the headline annuity total, not the cash value.
Enter the cash-option share (often roughly half the jackpot; the lottery publishes the exact figure).
Enter a combined federal + state tax estimate. Your real rate depends on where you live and your other income.
Read the lump sum after tax against the annuity total and yearly payment, then decide which shape of payout suits you.
Formula & worked example
A $100,000,000 jackpot with a 52% cash option and 37% combined tax: the lump sum before tax is $52,000,000 and $32,760,000 after tax. The annuity totals $63,000,000 after tax, or $2,100,000 a year over 30 years. With a 50% cash option and 40% tax, the lump sum after tax is $30,000,000 and the annuity $60,000,000.
Limitations — read this before you rely on it
This is an estimate, not a payout quote: cash-option percentages change with interest rates and the lottery, tax depends on jurisdiction and personal circumstances, and many real annuities increase each year rather than paying equal amounts. It ignores investment returns, inflation, and the time value of money — a dollar today is worth more than a dollar in 30 years.
Frequently asked questions
There is no universal answer: the annuity pays more in total, but the lump sum can be invested and is worth more today per dollar. The right choice depends on your age, discipline, tax position and investment returns.
The advertised jackpot is the total of 30 years of annuity payments. The cash option is what that stream is worth today, discounted at current interest rates.
Use a combined estimate for your state and federal position. Lottery winnings are taxed as income, so a large win can push you into the top bracket — talk to a tax adviser before claiming.
Not always: some lotteries pay an annuity that rises by about 5% a year, so early payments are smaller and later ones larger than the equal-payment figure shown here.
Almost never — once you elect lump sum or annuity, the choice is final. That is why comparing both figures before claiming matters.