A $674,000,000 Powerball jackpot is not one cheque. It is 30 payments over 29 years, each 5% bigger than the last: $10,144,667 in year one, rising to $41,756,826 in year 30, before tax.
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Powerball annuity payout chart
These are the gross payments, before any tax, for the current $674,000,000 jackpot. Federal tax is shown for a single filer claiming the standard deduction, assuming today's brackets held for 30 years — a simplification, since Congress will change them.
| Year | Gross payment | Federal tax | Net (no state tax) |
|---|---|---|---|
| 1 | $10,144,667 | −$3,703,527 | $6,441,140 |
| 2 | $10,651,901 | −$3,891,203 | $6,760,697 |
| 3 | $11,184,496 | −$4,088,264 | $7,096,232 |
| 4 | $11,743,720 | −$4,295,177 | $7,448,544 |
| 5 | $12,330,906 | −$4,512,436 | $7,818,471 |
| 6 | $12,947,452 | −$4,740,557 | $8,206,894 |
| 7 | $13,594,824 | −$4,980,085 | $8,614,739 |
| 8 | $14,274,566 | −$5,231,590 | $9,042,976 |
| 9 | $14,988,294 | −$5,495,669 | $9,492,625 |
| 10 | $15,737,709 | −$5,772,952 | $9,964,756 |
| 11 | $16,524,594 | −$6,064,100 | $10,460,494 |
| 12 | $17,350,824 | −$6,369,805 | $10,981,019 |
| 13 | $18,218,365 | −$6,690,795 | $11,527,570 |
| 14 | $19,129,283 | −$7,027,835 | $12,101,448 |
| 15 | $20,085,747 | −$7,381,727 | $12,704,021 |
| 16 | $21,090,035 | −$7,753,313 | $13,336,722 |
| 17 | $22,144,536 | −$8,143,479 | $14,001,058 |
| 18 | $23,251,763 | −$8,553,153 | $14,698,611 |
| 19 | $24,414,351 | −$8,983,310 | $15,431,041 |
| 20 | $25,635,069 | −$9,434,976 | $16,200,093 |
| 21 | $26,916,822 | −$9,909,225 | $17,007,598 |
| 22 | $28,262,663 | −$10,407,186 | $17,855,478 |
| 23 | $29,675,797 | −$10,930,045 | $18,745,752 |
| 24 | $31,159,586 | −$11,479,047 | $19,680,539 |
| 25 | $32,717,566 | −$12,055,500 | $20,662,066 |
| 26 | $34,353,444 | −$12,660,775 | $21,692,669 |
| 27 | $36,071,116 | −$13,296,313 | $22,774,803 |
| 28 | $37,874,672 | −$13,963,629 | $23,911,043 |
| 29 | $39,768,406 | −$14,664,310 | $25,104,095 |
| 30 | $41,756,826 | −$15,400,026 | $26,356,800 |
| Total | $674,000,000 | −$247,880,007 | $426,119,992 |
State tax is excluded here because it depends on where you live each year. Use the calculator at the top of this page, or your state page, to add it.
Why the payments grow 5% a year
The 5% step-up is written into the game rules, not negotiated. It exists so the annuity keeps pace with inflation in nominal terms — each payment is larger than the last, which sounds generous until you notice that 5% nominal growth against 3% inflation is about 2% of real growth per year.
By year 30, a payment that looks enormous is worth far less than it appears. Discount today's $41,756,826 year-30 payment at 3% inflation and it is worth roughly $17,719,357 in today's money.
Annuity vs lump sum, in one table
| Measure | Lump sum | Annuity |
|---|---|---|
| Paid before tax | $283,900,000 | $674,000,000 |
| Federal tax | −$104,988,856 | −$247,880,007 |
| Net, no state tax | $178,899,944 | $426,119,992 |
| Net as a share of the headline | 26.5% | 63.2% |
| Time to receive it all | Immediately | 29 years |
The annuity wins on total dollars in almost every scenario. The lump sum wins on control: $283,900,000 invested at 5% after tax for 29 years ends up in the same place, and at 7% it beats the annuity comfortably. The real question is whether you will actually invest it.
The full argument, including the break-even return, is in lump sum vs annuity.
Questions
How are the 30 Powerball annuity payments calculated?
The advertised jackpot is divided into 30 payments that grow 5% each year. The first payment is the smallest and the 30th is the largest — on today's $674M jackpot, $10,144,667 in year one and $41,756,826 in year 30. Each payment is taxed in the year you receive it.
Is the annuity paid monthly or yearly?
Once a year. You receive one payment immediately after claiming, then 29 more annually, for 30 payments over 29 years. It is not a monthly income stream.
What happens to the annuity if I die?
The remaining payments pass to your estate or a beneficiary you designate, depending on the state lottery's rules and your claim paperwork. They are still taxable income to whoever receives them, and the remaining value can count toward your estate for estate tax purposes.
Can I switch from annuity to lump sum later?
No. The choice is made when you claim, and states generally lock it at that point. After the fact, the only way to convert is to sell future payments to a factoring company at a discount — a transaction that requires court approval in many states and rarely prices in your favour.