You Won The Lottery: Lump Sum Cash Or Installments... Which Is Best?


Dan and Christine Bruckner won $208 Million in the New York Mega Millions jackpot, and chose the lump sum payment.

Lottery winners are often in shock when they finally bank their life-changing wealth. They get advice from everyone, from well-meaning family members to financial advisors.

One of the biggest decisions which winners have to make quickly is whether to take a lump-sum cash option, or yearly annuity payments.

When you take a lump-sum payment, it's typically a smaller amount than the reported jackpot. But annuity payments will generally add up to a larger amount than the lump sum. 


The Mega Millions top lottery jackpot prize is made up of a cash amount gained from tickets sold in the game. The lottery organization then figures out how much interest they can get for the next 26 years, and adds this to the cash amount. 

This gives the widely advertised main prize, also available in 26 annual payments called an Annuity. 

So which is best - all cash, or annual payments?

Your decision will probably boil down to your age:

  • If you win later in life (60+), you'll get more value with an All Cash Option.

  • If you're young, your decision will depend on whether you're going to live for the full term.

Many people don't realize that when a win enters their life, most of them change their lifestyle. They experience more travel, drink and eat more, buy toys - like planes and fast cars - and take more risk. So their life expectancy may not be that easy to predict.

You can take advice. There are websites that calculate the opportunity cost of a Cash Option or an Annuity. This one is for players with a maths brain!

Watch some more advice from Powerball:

Take our poll and see what the popular option is...

(Poll Started 2017)