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What is the cash option on Mega Millions 790 million?

The Mega Millions jackpot recently surpassed $790 million, making it the fourth largest jackpot in U.S. lottery history. With a jackpot this large, many lottery players are wondering what the cash option is if they win and if it’s better to take the annuity or cash option.

The cash option, also known as the lump-sum option, is the amount of money you would receive right away if you win the jackpot prize. The annuity option is paid out over 29 years in annual installments. With the Mega Millions $790 million jackpot, the cash option is estimated to be around $464.4 million before taxes. The annuity option is estimated to pay out about $790 million before taxes over the full 29 years.

So should you take the cash or annuity if you win? There are advantages and disadvantages to both options to consider.

Cash Option Advantages

Here are some of the main benefits of taking the cash option if you win the Mega Millions jackpot:

– You get all the money right away in one lump sum. This allows you to invest, spend, donate, or use the money however you want immediately.

– Taxes are only applied once on the lump sum amount. With the annuity, taxes are applied annually on each installment payment.

– You don’t have to worry about waiting decades to get all your winnings or risk not living long enough to receive the full amount.

– You avoid the risk of default. There is a very small chance the lottery could go bankrupt down the road and default on future annuity payments.

– Interest rates may rise in the future, allowing you to invest the lump sum and achieve greater returns than the set annuity amount.

– You have full control and flexibility over the money from the start to use, invest, or spend as desired.

Annuity Option Advantages

Here are some of the main pros for taking the annuity option:

– It provides stable income for decades. You are guaranteed annual payments of tens of millions for the next 29 years.

– It protects against reckless spending. Only receiving a portion each year prevents wasting all the money immediately or making bad investments.

– It can provide protection from creditors. Annuitized lottery installments are sometimes protected from lawsuits and creditors.

– It may be considered more responsible and conservative. Receiving a steady income over decades encourages responsible money management.

– It avoids big tax bills upfront. Taxes are spread out over years as you receive payments, avoiding a massive tax hit immediately.

– It could result in more money long-term. If you were to conservatively invest lump sum payments each year, it may grow to exceed the full annuity amount.

So in summary, the annuity provides a steady, conservative income option, while the cash offers flexibility and control. There are good arguments on both sides.

Cash Option Amount on the $790 Million Jackpot

Based on the $790 million annuity jackpot, the estimated cash option payout is $464.4 million. This is the amount of money the winner would receive immediately if they choose the cash option. It’s estimated by taking the full annuity amount and discounting it to today’s money.

This cash option is before any taxes are withheld. The winner would have to pay federal and possibly state taxes immediately on this payout, which could take out around one-third or more of the lump sum amount. After taxes are paid, the winner would likely end up with somewhere around $300 million or more.

Still an amazing haul, but taxes make a significant difference in how much you actually take home with the cash option. The annuity avoids a big initial tax hit but is taxed annually over three decades.

State and Federal Taxes on Lottery Winnings

Both the cash and annuity options for lottery winnings like Mega Millions are subject to taxes. Here is how state and federal taxes typically apply:

Federal Taxes:

– The top federal tax rate of 37% applies to lottery winnings for any amount over $500,000. This top rate will take a big cut of either jackpot payout option.

– For winnings over $5 million, the IRS requires an additional 24% in withholding immediately for federal taxes. This applies to the cash option.

State Taxes:

– Most states with lotteries also tax winnings, typically at top ordinary income tax rates. This varies by location but can be over 10% in some spots.

– A few states like Florida, Texas, and others do not levy any state income tax. If you win there, you save a bit.

– Some cities may also tack on local taxes, like New York City’s additional 3.88% tax on winnings.

With the nearly $465 million Mega Millions cash payout, you would immediately have about 40% withheld between federal and possibly state taxes. But your final tax liability may be lower once you file returns.

Payout Structures

If you take the annuity, Mega Millions winners are paid out over 29 years, with increasing payments each year. Here is how it works:

– Year 1: Choice of 5% or 30% of jackpot amount. Most take the 30% initial payment.

– Years 2-29: Remaining 70% of jackpot paid out in equal annual installments.

– Each payment increases by 5% annually to adjust for inflation.

For the estimated $790 million jackpot, that would break down as:

Year 1: $237 million (30% upfront payment)

Years 2-29: Remaining $553 million paid annually, starting around $19 million and increasing 5% each year.

So with the annuity, you defer some taxes but have to wait decades to receive the full amount. With the lump sum, you get significantly less upfront but have immediate access and flexibility.

How To Play and Odds of Winning

Here are the basics on how to play Mega Millions and odds of winning:

– Players choose 5 main numbers from 1-70, and 1 Mega Ball number from 1-25.

– To win the jackpot, you must match all 5 main numbers plus the Mega Ball.

– Tickets cost $2 per play. Players can multiply prizes with the Megaplier for an extra $1 per play.

– Drawings are held every Tuesday and Friday at 11 p.m. ET.

– The odds of winning the jackpot are about 1 in 302.6 million.

– Overall odds of winning any prize are 1 in 24.

So while the odds are incredibly long, someone eventually does hit it big with Mega Millions, like this $790 million jackpot. You just need an incredible amount of luck on your side.

Should You Take the Cash or Annuity?

There are good arguments on both sides. With the cash option, you gain flexibility, control, and avoid long-term risk. With the annuity, you receive stable income for decades and avoid a huge tax hit upfront.

Most experts suggest taking the cash, as you can earn significant returns investing conservatively, and the annuity’s value is discounted. But it depends on your goals. Do you want to leave generational wealth behind, donate to charity, or spend lavishly immediately?

Here are a few final pros and cons to consider:

Cash Payout Pros:

– Full flexibility and control over money from day one
– Can grow lump sum significantly through conservative investments
– Avoid long-term risk and getting less than advertised jackpot
– Lock in gains and don’t depend on future market returns

Cash Payout Cons:

– Big immediate tax hit, possibly over 40% withheld initially
– May be mismanaged, spent recklessly, or lost through bad investments
– Forfeit stable income for decades if money is mismanaged

Annuity Pros:

– Guaranteed income of millions per year for 29 years
– Avoids massive immediate tax hit, spread out over decades
– Less chance of mismanaging or losing money immediately
– Certain income for life regardless of lifespan or investments

Annuity Cons:

– Lose flexibility and control, forced to take payments on set schedule
– May receive less money in the long run investing lump sum
– Subject to inflation eating away at fixed payments over decades
– Slight risk (albeit very low) of lottery defaulting down the road

Ultimately it comes down to your personal preferences and how disciplined and savvy you are with large sums of money. A financial planner can help analyze the options. But either way, it’s an incredible amount of money that most would find life-changing.

What To Do If You Win

Here are some top tips if you win a mega jackpot like the $790 million Mega Millions prize:

– Sign the back of your winning ticket immediately and keep it very safe. Consider putting it in a safety deposit box or purchasing a personal safe.

– Get professional legal and tax advice as soon as possible. You want to make sure you take all the proper steps to secure your winnings.

– Choose the annuity or cash option carefully based on your goals. The lottery may encourage annuity, but cash may be better for investing.

– If taking a lump sum, work with financial advisors to put aside money immediately for taxes so you are not surprised by a huge bill.

– Make a plan before claiming your prize. Figure out your priorities, whether to share with family, charities, etc. Impromptu spending is unwise.

– Assemble a team of experienced professionals. This may include an accountant, financial planner, lawyer, and investment advisor. Lean on their expertise.

– Live below your means, at least at first. Make some splurges on things like housing, but don’t drastically change your lifestyle overnight.

– Set limits on requests for money from friends and family. Be generous, but don’t feel obligated to support every request.

– Avoid high risk investments or business ventures. Stick to proven, reliable investment vehicles rather than speculating.

– Keep your win private if possible. This helps avoid long-lost relatives and friends asking for money.

Past Mega Millions Jackpot Winners

Here is a look at the some of the biggest Mega Millions jackpot winners from recent history:

1. $1.537 Billion – Won on 10/23/2018. Single ticket sold in South Carolina at a KC Mart convenience store in Simpsonville. Winner chose to remain anonymous. At the time it was the world’s largest lottery prize ever won on a single ticket.

2. $656 Million – Won on 3/30/2012 by a group of 3 winners from Kansas, Illinois and Maryland. The Maryland winners and one Kansas winner remained anonymous. The Illinois winners were Merle and Patricia Butler.

3. $648 Million – Won on 12/17/2013 by Ira Curry from Georgia and Steve Tran from California. Curry bought just 1 ticket. Tran was part of a small office pool of co-workers in San Jose.

4. $543 Million – Won on 7/24/2018 by 11 co-workers at a financial services company in California who pooled money for tickets. Each took home about $50 million after taxes.

5. $536 Million – Won on 7/8/2016 by the Smith family from New Hampshire. A family trust claimed the prize to stay anonymous, but their names were eventually revealed in court.

While everyone dreams of winning it big, the chances are infinitesimally small. But Mega Millions has still created some incredibly large jackpots over the years for a few very lucky winners. If someone wins this latest $790 million prize, it will be another life-altering Mega Millions payout.

Frequently Asked Questions

Here are answers to some common questions about the Mega Millions jackpot cash payout option:

What is the cash value of the $790 million Mega Millions jackpot?

The estimated cash value or lump-sum payment is around $464.4 million before any taxes are applied. This is the amount the winner would receive immediately if they choose the cash option instead of annuity.

How are the cash and annuity amounts calculated?

The cash value is determined by actuaries based on an annuity rate of return. This discount rate is used to estimate the present value of the full jackpot amount paid out over 29 years.

How much would the winner actually receive after taxes on $464.4 million?

With the top federal tax rate of 37% plus possible state taxes, the winner would likely take home around $300 million or more. About 40% could be withheld for taxes on a prize this large.

What percentage of lottery winners take the cash option?

Over 60% of big jackpot winners take the cash prize rather than annuity. But it varies case-by-case based on personal preference on flexibility vs steady income.

Can you remain anonymous if you win Mega Millions?

Rules vary by state. Some allow you to collect winnings through a trust or LLC to stay anonymous. Others like California require your name to be publicly released.

How quickly do you receive the cash payment if you win?

It may take 4-6 weeks to confirm the win and process the lump sum payment. Winners must first sign the ticket and claim the jackpot in the state it was purchased.

What are the odds of winning Mega Millions?

The odds of winning the jackpot are about 1 in 302.6 million. You have a much better chance at smaller prizes like $1 million which odds around 1 in 12.6 million.


The Mega Millions jackpot has risen to an astounding $790 million, with a cash value estimated at $464.4 million. Winners must decide between taking the lump sum or an annuity paid out over 29 years. There are good arguments on both sides – the cash offers flexibility while the annuity provides stable income. Taxes will take a big chunk, but either option will be life-changing. While the odds are incredibly small, someone eventually will match all 5 numbers and the Mega Ball to take home this huge prize. It will likely make them instantly one of the biggest lottery winners in history.