# Lottery Annuity Calculator

URL: https://speedycalculator.com/calculators/finance/lottery-annuity/
Last updated: 2026-10-25

> The lottery annuity calculator shows the yearly payments of a lottery annuity – 30 payments that rise 5% a year – before and after tax, compared with taking the lump sum and investing it.

## Inputs

- Advertised prize (annuity value)
- Number of payments
- Yearly payment increase (%)
- Lump sum as a share of the prize (%)
- Tax rate (%)
- Return if you invest the lump sum (%)

## Results

- First payment (before tax)
- Last payment (before tax)
- First payment after tax
- Total annuity after tax
- Lump sum after tax
- Lump sum invested over the same period (after tax on growth)
- Annuity payments invested as they arrive

## Formula

```
First payment = prize × g ÷ ((1 + g)^n − 1)
Payment k = first × (1 + g)^(k − 1)
Lump sum invested: value = lump × (1 + r)^n
```

## Explanation

Choosing the annuity spreads the windfall (and the tax) over 29 years and protects against overspending. Taking the lump sum lets you invest it – if your after-tax return beats about 4–5%, the lump sum usually comes out ahead.

### How to use the Lottery Annuity Calculator

- **Advertised prize (annuity value)**
- **Number of payments**
- **Yearly payment increase**
- **Lump sum as a share of the prize**
- **Tax rate**
- **Return if you invest the lump sum**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the advertised prize, the number of payments, the yearly increase, the lump sum share, your tax rate and expected return.

### Tips

- Use your real spending from bank statements rather than guesses.
- Automate savings so they happen before you spend.
- Revisit your plan once a year or after any big life change.
- Keep an emergency fund before investing for long-term goals.

### Common mistakes to avoid

- Underestimating irregular expenses such as car repairs, gifts and annual bills.
- Ignoring inflation for long-term goals.
- Taking on high-interest debt to fund wants.

### Inputs explained

FieldWhat to enterAdvertised prize (annuity value)Amount in your currencyNumber of paymentsA numberYearly payment increaseIn %Lump sum as a share of the prizeIn %Tax rateIn %Return if you invest the lump sumIn %

### What each result means

- **Last payment (before tax)** = [First payment (before tax)]×(1 + [Yearly payment increase]÷100)^([Number of payments] - 1)
- **First payment after tax** = [First payment (before tax)]×(1 - [Tax rate]÷100)
- **Total annuity after tax** = [Advertised prize (annuity value)]×(1 - [Tax rate]÷100)
- **Lump sum after tax** = [Advertised prize (annuity value)]×[Lump sum as a share of the prize]÷100×(1 - [Tax rate]÷100)
- **Lump sum invested over the same period (after tax on growth)** = [Lump sum after tax]×(1 + [Return if you invest the lump sum]÷100×(1 - [Tax rate]÷100))^([Number of payments] - 1)
- **Annuity payments invested as they arrive** = gfv([Return if you invest the lump sum]÷100×(1 - [Tax rate]÷100), [Number of payments], [First payment (before tax)]×(1 - [Tax rate]÷100), [Yearly payment increase]÷100, 0)

### Example values

How the main result changes when **Advertised prize** changes and everything else stays at the example values above:

Advertised prize (annuity value)Total annuity after tax50,000,00030,000,00075,000,00045,000,000100,000,00060,000,000125,000,00075,000,000150,000,00090,000,000200,000,000120,000,000

## Worked example

Inputs — Advertised prize (annuity value): $100,000,000; Number of payments: 30; Yearly payment increase: 5 %; Lump sum as a share of the prize: 48 %; Tax rate: 40 %; Return if you invest the lump sum: 5 %.

Results — First payment (before tax) = $1,505,143.51; Last payment (before tax) = $6,195,374.77; First payment after tax = $903,086.10; **Total annuity after tax = $60,000,000.00**; Lump sum after tax = $28,800,000.00; Lump sum invested over the same period (after tax on growth) = $67,869,086.57; Annuity payments invested as they arrive = $85,552,954.72.

## FAQ

**How does a lottery annuity work?**
You receive one payment now and 29 more yearly, each 5% bigger.

**Is the lump sum or annuity better?**
It depends on discipline, taxes and returns; the annuity is safer for many winners.

**What happens to annuity payments if I die?**
Remaining payments go to your estate.

**What formula does the Lottery Annuity Calculator use?**
First payment = prize × g ÷ ((1 + g)^n − 1).