The numbers for the Mega Millions $333 million jackpot were drawn Friday night, and two winning tickets were purchased, one in New York and the other in California. The jackpot began at $12 million in July and ballooned to $333 million after 14 draws with no one hitting all six numbers. Officials raised the jackpot from $325 million last week, the second-largest jackpot in Mega Millions history, after a spike in ticket sales. California, Georgia, Illinois, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Texas, Virginia and Washington are the 12 states that participate in the Mega Millions lottery. Mega Millions is the nation’s largest multi-state jackpot game.
Lump Sum or Annuity? Annuity payments are distributed over a 26-year-period. For every $1 million in the jackpot, a winner would receive about $38,500 a year before taxes, according to the Mega Millions Web site. In this case, a lone winner would annually earn $12.8 million before taxes. The lump sum is calculated using the present value of U.S. Treasury Bills based on market rates. Using that formula, Mega Millions estimated that a single winner would take home $210 million before taxes if he or she chooses the lump sum option. A vast majority of winners choose the lump sum payment option. Because of inflation and limitations of investing options, the lump sum choice is usually a better option.
Would $1 be worth more right now or 26 years down the road? No brainer right? One dollar earned now will only have the purchasing power of about 46 cents at an annual inflation rate of 3%. Now multiply those rates by $333 million. See why you should take the lump sum? $210 million before taxes, maybe $100 million after taxes in today’s dollars will equal a lot more purchasing power over the years than $12 million before taxes two decades from now.
Your Chances Of Winning. The odds really are beyond slim. “Slim and None” do not even come close to describing your odds. You have a one in 175,711,536 chance of winning. That is equal to a 0.0000006% chance.
How To Win The Lottery. Want to win the lottery? You need to buy every single combination of numbers that could come up, of course! That equals 176,000,000 different number combinations. So, at a price of $1 per ticket, you could have doubled your investment of $176 million if you bought every possible winning number.
So, What Would $333 Million Buy You?
- The Phoenix Coyotes Hockey Team
- 876 Rolls Royce Phantoms
- 145,000 Panasonic 58 inch Plasma TVs
- 714,408 Shares of Google’s Common Stock
- 127.4 Million Gallons of Regular Unleaded Gasoline
- 1,570 homes. The median home listing price in America is approximately $212,000.
- You could buy 3,330 Porsche 911 Carreras or 60,344 brand new 2009 H2 Hummers.
{ 3 comments }
If I had won the big jackpot at the online lottery, i would have open a shuttle service to the moon…
your article said-
“For every $1 million in the jackpot, a winner would receive about $38,500 a year before taxes, according to the Mega Millions Web site.”
So, you are saying that if the jackpot is 1 million dollars, the winner only gets $38,500 dollars, THEN has to pay taxes on that?
It just does not sound very good to me.
@Sheera – You are right about the $38,500. That is the amount received if the winner chooses the yearly payment option like an annuity. Typically, choosing the yearly payment option is a bad deal with respect to the lump sum. You can invest the lump sum and make a better return on your money than choosing the monthly option.
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