There are many options for how to handle a lottery jackpot, including claiming the prize as cash or annuity spread over 30 years. Generally, lottery winners will elect to receive a lump sum payment because they prefer to access all funds immediately. A lump sum is the preferred option among financial advisors, accountants, estate lawyers, and money managers. These professionals earn fees based on a percentage of the amount you receive, which is less than what you actually win. You will also have a limited amount of time to claim your prize before taxes are deducted.

However, lottery winners aren’t required to accept this option if they choose to take a lump sum payout. Although the advertised jackpot amount is a substantial sum, the current cash value of the jackpot varies significantly. It generally equals about half of the advertised prize amount. If you choose the latter option, the AfterLotto payout calculator will calculate your lottery payout after federal and state taxes. You can also use this calculator to determine the maximum annuity payout for your lottery prize.

Lottery winners can choose to collect their prize in one lump sum minus taxes. In some cases, however, they can opt to receive their prize over several years, which will reduce their tax burden. Annuities also offer a tax-deferred income for 29 years, which can be beneficial for people who are trouble-controlling. The benefits of annuity payments are many. It won’t take you a large lump sum payment to get started, and you’ll avoid a large tax burden in the long run.