facebookThe Mega Millions jackpot in the U.S has recently hit $1 Billion. If you win the jackpot, would you opt for annuity(annual payments over 29-years) or would you opt for the lump sum of $548M? ? - Seedly

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Ng Wei En

Ng Wei En

Analyst at Mastercard

18 Apr 2019

Random

The Mega Millions jackpot in the U.S has recently hit $1 Billion. If you win the jackpot, would you opt for annuity(annual payments over 29-years) or would you opt for the lump sum of $548M? ?

Fun fact: The Mega Millions annuity is paid out as one immediate payment followed by 29 annual payments. Each payment is 5% bigger than the previous one.

As a guideline, for a typical jackpot of $100 million on Mega Millions, the initial payment would be about $1.5 million. For a $1B jackpot, the first payment would be approximately $15M and will grow at a 5% rate annually until the last annual payment.

Discussion (1)

What are your thoughts?

Hariz Arthur Maloy

Hariz Arthur Maloy

20 Oct 2018

Independent Financial Advisor at Promiseland Independent

The initial tax on winnings is extremely high. I would usually go for lumpsum and get my own private annuity, but in this scenario, the annuity payout doesn't seem all too bad. I might just choose the annuity payouts.

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