Cash vs. annuity: Which payout should you pick if you win Mega Millions, Powerball jackpots? - Insurance News | InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Newswires
Topics
    • Advisor News
    • Annuity Index
    • Annuity News
    • Companies
    • Earnings
    • Fiduciary
    • From the Field: Expert Insights
    • Health/Employee Benefits
    • Insurance & Financial Fraud
    • INN Magazine
    • Insiders Only
    • Life Insurance News
    • Newswires
    • Property and Casualty
    • Regulation News
    • Sponsored Articles
    • Washington Wire
    • Videos
    • ———
    • About
    • Meet our Editorial Staff
    • Advertise
    • Contact
    • Newsletters
  • Exclusives
  • NewsWires
  • Magazine
  • Newsletters
Sign in or register to be an INNsider.
  • AdvisorNews
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Exclusives
  • INN Magazine
  • Insurtech
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Video
  • Washington Wire
  • Life Insurance
  • Annuities
  • Advisor
  • Health/Benefits
  • Property & Casualty
  • Insurtech
  • About
  • Advertise
  • Contact
  • Editorial Staff

Get Social

  • Facebook
  • X
  • LinkedIn
Annuity News
Newswires RSS Get our newsletter
Order Prints
March 27, 2024 Newswires
Share
Share
Post
Email

Cash vs. annuity: Which payout should you pick if you win Mega Millions, Powerball jackpots?

CBS - 9 WNCT (Greenville, NC)

(NEXSTAR) — Lottery players nationwide have the chance at nearly $2 billion as the Mega Millions and Powerball jackpots continue to roll. If you're lucky enough to win one (or both), you'll face a big decision: how would you like your winnings paid out?

As of Tuesday, the Mega Millions jackpot is estimated at $1.12 billion, the fifth-largest in game history and the eighth-largest in U.S. history behind the $1.337 billion Mega Millions jackpot won in Illinois two years ago.

Meanwhile, without a winner in Monday's drawing, the Powerball jackpot has reached an estimated $865 million. That makes it the fifth-largest in Powerball history behind a $1.08 billion jackpot won in California last year.

The odds of winning either jackpot are steep — 1 in 302.6 million for Mega Millions, 1 in 292.2 million for Powerball — but if you overcome those odds and secure the record-setting jackpots, there are a number of steps experts suggest following. That includes building your team — a financial advisor, a tax advisor and a lawyer are highly recommended — and keeping the ticket secure.

These are the best, worst states to win the lottery in

Once you're ready to come forward and claim your prize, you'll have a big decision to make: take the annuity option or the cash payout.

The annuity option is the dollar amount you'll most frequently see advertised when it comes to Mega Millions and Powerball. For the former, it's currently $1.12 billion, and for the latter, $865 million. If you select this payout method, you'll receive a one-time payment, followed by 29 annual payments that increase by 5% each time until they reach the amount you won.

The cash option — $537.5 million for Mega Millions, $416.1 million for Powerball — signifies the amount of money game officials have determined is needed to fund the annuity option.

If you want your winnings right away, you'll want to select the cash option, but if you want more money in the end, you may prefer the annuity option.

So how do you know what's best for you?

"Most people take the lump sum because they want the money, they want to control it," Robert Pagliarini, president and chief financial advisor for Pacifica Wealth Advisors and author of "The Sudden Wealth Solution," previously told Nexstar. "I honestly think most people are probably better off taking the annuity."

If you win the $1 billion Mega Millions jackpot, here's what experts say to do next

As mentioned, the annuity option means you'll receive a check every year with another, slightly larger portion of your lottery winnings. While that annual allowance may sound annoying to a newfound jackpot winner, it can also help protect you.

For example, let's say you mess up with your winnings one year. Maybe you spend it unwisely, make some poor purchases, or gift too much away. If you had selected the cash option, "there's no do-over, there's no reset," Pagliarini explained.

"But with the annuity, you get to redeem yourself every single year," he added. "It might take a few years, it might take five or six years, but eventually you'll figure it out."

You'll also see more taxes are withheld if you select the lump sum cash payout. Every state is required to withhold 25% in a federal lottery tax, and after additional withholdings, you'll be losing roughly 37% of your jackpot to taxes. Then, depending on where you live, you'll see even more withheld for state taxes.

However, Jeremy Keil, a financial adviser from Wisconsin, previously told the Associated Press that "there's no bad choice" when it comes to the payout you select. Keil said Powerball's annuity assumes a 4.3% investment gain of the jackpot's cash prize.

Powerball, Mega Millions jackpots: Is your state 'due' for a win?

"If you think you can beat the 4.3%, you should take the cash," Keil said. "If you don't, take the annuity."

Matt Chancey, an investment adviser in Tampa, Florida, also urged winners to understand that if advisers earn a percentage from the investment of all that money, they have a financial stake in how the money is paid out and should be clear about any potential conflict. He said talented investors probably could make more money than paid through an annuity, but there is risk and advisers need to be open about their potential gain depending on the jackpot winners' choices.

Regardless of what option you pick, if you win either jackpot, Pagliarini recommends building your team of experts, signing the ticket and keeping it secure, and "make [your payout] decision as fast as you possibly can, in a way where you feel very comfortable about the decision."

Mega Millions and Powerball tickets are $2 each. Mega Millions drawings are held every Tuesday and Friday at 11 p.m. ET, while Powerball drawings are held every Monday, Wednesday, and Saturday at 10:59 p.m. ET.

Jeremy Tanner and The Associated Press contributed to this report.

Older

Fed rates: how far they will cut rates this year and when they will do so

Newer

Selling your home could boost your nest egg — but is it worth it?

Advisor News

  • Global economy ‘resilient’ in the wake of massive disruption
  • Cryptocurrency legislation takes one step forward with bipartisan support
  • IRS CEO FRANK J. BISIGNANO VISITS OHIO TO TOUT WORKING FAMILIES TAX CUTS PROVISIONS ON NO TAX ON CAR LOAN INTEREST, NO TAX ON OVERTIME, ENHANCED DEDUCTION FOR SENIOR CITIZENS
  • The hidden flaw in insurance AI adoption for advisors and carriers
  • Rising healthcare costs impact 401(k) accounts
More Advisor News

Annuity News

  • MetLife Expands Guaranteed Retirement Income Offering with Innovative Flexible Annuity Option
  • How annuities can help protect retirees from financial scams
  • MetLife Inc. (NYSE: MET) Climbs to New 52-Week High
  • The Standard and Pacific Guardian Life Announce Entry into Agreement to Transition Individual Annuities Business
  • AuguStar Retirement launches StarStream Variable Annuity
More Annuity News

Health/Employee Benefits News

  • UPDATED: Hecklers disrupt Hinson rally as Iowa U.S. Senate candidate touts stock trading ban
  • Hecklers disrupt Hinson rally ahead of Tuesday primary
  • In Case You Missed It: Hecklers disrupt Hinson rally
  • National Association for Veterans Rights Raises Questions About Federal Court Ruling Impacting Veteran Claims Assistance
  • From Network Automation to Agentic NetOps: NetBrain Sets the Standard for Deploying AI in Network Operations
More Health/Employee Benefits News

Life Insurance News

  • AM Best Affirms Credit Ratings of Halyk-Life, JSC
  • AM Best Affirms Credit Ratings of Symetra Financial Corporation and Its Subsidiaries
  • AM Best Assigns Credit Ratings to Park Avenue Life Insurance Company
  • Nationwide reaches reinsurance agreement with MassMutual on UL policy block
  • Best’s Market Segment Report: AM Best Maintains Outlook on Philippines’ Non-Life Insurance Segment at Stable
More Life Insurance News

- Presented By -

NEWS INSIDE

  • Companies
  • Earnings
  • Economic News
  • INN Magazine
  • Insurtech News
  • Newswires Feed
  • Regulation News
  • Washington Wire
  • Videos

FEATURED OFFERS

Why Blend in When You Can Make a Splash?
Pacific Life’s registered index-linked annuity offers what many love about RILAs—plus more!

Life moves fast. Your BGA should, too.
Stay ahead with Modern Life's AI-powered tech and expert support.

Bring a Real FIA Case. Leave Ready to Close.
A practical working session for agents who want a clearer, repeatable sales process.

Discipline Over Headline Rates
Discover a disciplined strategy built for consistency, transparency, and long-term value.

You Could Be Losing Up to 20% of Your Commissions
GreenWave helps you find, fix, and prevent commission errors.

Press Releases

  • Rockwood Programs Appoints Kerry Ladouceur as Vice President, Financial Lines
  • JP Insurance Group Launches Commercial Property & Casualty Division; Appoints Joe Webster as Managing Director
  • Sequent Planning Recognized on USA TODAY’s Best Financial Advisory Firms 2026 List
  • Highland Capital Brokerage Acquires Premier Financial, Inc.
  • ePIC Services Company Joins wealth.com on Featured Panel at PEAK Brokerage Services’ SPARK! Event, Signaling a Shift in How Advisors Deliver Estate and Legacy Planning
More Press Releases > Add Your Press Release >

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Advisor News
  • Annuity Index
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • From the Field: Expert Insights
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Magazine
  • Insiders Only
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Washington Wire
  • Videos
  • ———
  • About
  • Meet our Editorial Staff
  • Advertise
  • Contact
  • Newsletters

Top Sections

  • AdvisorNews
  • Annuity News
  • Health/Employee Benefits News
  • InsuranceNewsNet Magazine
  • Life Insurance News
  • Property and Casualty News
  • Washington Wire

Our Company

  • About
  • Advertise
  • Contact
  • Meet our Editorial Staff
  • Magazine Subscription
  • Write for INN

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2026 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • InsuranceNewsNet Magazine

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.
Insurance News | InsuranceNewsNet