One check or a lifetime of them
Lump Sum vs Annuity
Almost every winner asks the same question. Model the trade-off between taking cash now or monthly payments over decades.
Annuity assumed: 30 graduated annual payments, growing ~5% per year, typical of US lotteries.
The real question
Cash now vs. payments, honestly
The lump sum is the prize's present value — what the lottery could actually afford today. The annuity pays roughly that same present value out over time with built-in growth. So the annuity's headline total is bigger, but that's because of expected interest the lottery earns for you. If you can invest the lump sum and earn a comparable return, the cash option can end up ahead — but it carries risk and depends entirely on your discipline. There is no objectively "right" answer; it's about your risk tolerance.
The breakeven point this tool shows is the annual return your invested lump sum would need to match the annuity. Below it, the annuity is worth more; above it, the lump sum wins.
Lump Sum vs Annuity FAQ
Why is the annuity total so much higher?
Because it includes decades of assumed interest the lottery can earn on the prize money and pays out to you gradually. The lump sum is the discounted present value.
Which option do most winners choose?
The majority of large winners take the lump sum, often to control the money. But many don't manage it well. Annuity offers structure and protection from overspending.
Can I switch from annuity to lump sum later?
No. In most US lotteries, you must choose within a short window after winning. This is why professional advice before the deadline is critical.