Difference Between Cash Value and Annuity
If you win a Mega Millions jackpot, you will choose how to be paid: Cash Option or Annual Payout. Prize claim parameters vary from state to state. Contact your Mega Millions lottery for detailed information.
Annuity option: 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. We used to pay the jackpot in equal installments, but players expressed concern that the cost of living would be increasing while their payments were not. We changed to payments that increase each year to help protect winners’ lifestyle and purchasing power.
For a typical jackpot of $50 million, the initial payment would be more than $750,000, and future annual payments would grow to almost $3.1 million.
When the jackpot is $100 million, each payment is twice as big. When the jackpot is $25 million, each payment is half as big, etc.
Cash option: A one-time, lump-sum payment that is equal to the cash in the Mega Millions jackpot prize pool.