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After-Tax Lottery Payout Structure Comparison Terminal

A jackpot's advertised value is the annuity — a stream of yearly payments. The "cash option" is a smaller lump sum you get now, and the two are never worth the same. But the annuity isn't one thing: each Texas game pays it on its own schedule, which changes the math and the advice. See how the structures compare, then run your game's real, current numbers.

01

Compare the Structures, Pick Your Game

Only three Texas games offer a lump-sum-or-annuity choice, and they don't share a schedule. Powerball and Mega Millions stretch the prize over 30 payments that grow 5% a year; Lotto Texas also pays 30, but level (equal) installments rather than graduated ones — which is why there's no single "lottery annuity" answer. Compare the structures below, then open your game's simulator: each one starts on that game's real schedule and current jackpot, and plays both choices out year by year — real federal tax brackets, the return you'd earn, your living expenses.

Powerball 30 +5% larger each year (graduated) Mega Millions 30 +5% larger each year (graduated) Lotto Texas 30 Equal (level) payments

The other five Texas draw games pay fixed prizes with no annuity option, so there's nothing to compare.

02

Lump Sum or Annuity? The Rule of Thumb

Why does the payment schedule matter? Because money later is worth less than money now. The fair way to compare a lump sum against an annuity is in today's dollars: each game's simulator plays both choices out year by year — taxed through real federal brackets, invested at the return you expect, your living expenses deducted — and charts what you'd actually have across the full annuity period.

The rule of thumb every simulation here demonstrates: if you can reliably earn more than the annuity's built-in growth on your own investments, the lump sum tends to win; if you can't — or you value the discipline of guaranteed yearly income — the annuity can be worth more. Open your game's simulator above to see it on real, current numbers.

Which game loses the least? →
After-tax expected value per $1, every draw.
You won — now what? →
The checklist before you claim.
03

Methodology, Sources & Verification

Every number here is either read from a cited source or computed from cited inputs. Official feeds and rules, tax sources, third-party data, and modeled assumptions are identified separately below — along with when each input was last checked — so a source that falls out of date is easy to spot rather than hidden in a single blanket date.

Annuity payout schedule

The number of annual payments and whether they are level or graduated come from each game’s official payout rules. National games (Powerball, Mega Millions) publish an identical schedule in every state; Lotto Texas is a Texas-run game. Its rule fixes the 29 later installments as equal while allowing a higher first payment. Because any first-payment excess is draw-specific, the calculator models a level stream and discloses that limitation.

Federal tax tables & state treatment federal verified 2026-07-12 · state verified 2026-07-20

2026 federal ordinary-income brackets, capital-gains brackets, and standard deduction (IRS Rev. Proc. 2025-32). Texas levies no individual income tax (0% state treatment). Bracket thresholds and the standard deduction drift forward at your inflation assumption between refreshes. Sources:

04

Disclaimer

This page — and the per-game calculators it links to — is educational, not tax, legal, or financial advice. The calculators use simplified assumptions, spelled out on each game's page. Always confirm real figures with the official Texas Lottery and consult your own qualified advisors before deciding. Use is subject to the site Terms & Conditions and Privacy Policy.