Megamillions is up to $970,000,000. That means that the cash option is $548,000,000.
Different states tax things differently, of course, but after the Feds take their 24% bite, Colorado’s taxes would result in… here, let me cut and paste this from the site:
Colorado: Four percent state tax
Annuity: – $1,293,333 per year (avg. net pay per year: $23,280,000; after 30 payments: $698,400,000)
Lump sum: – $21,944,000 (net payout: $394,992,000)
So to restate a little less confusingly, after the Feds take their cut and then after Colorado takes its cut, the choice is between an average $23,280,000/year for 30 years *OR* a one-time lump sum of $394,992,000.
That’s a lot of money. I might even be willing to go so far as to say that you’d have to do some extraordinary things spend all of that money. I’m not saying it’s impossible… you could try to buy a controlling interest in whatever the modern version of pets.com happens to be or you could finance a movie like John Carter 2 but if you kept it to mere human-scale consumption… I dare say that you’d never be able to spend that.
So let’s assume that you take care of the close family members and friends that you feel a real obligation to. Pay of this or that mortgage. You set up the college funds you need to set up (“just get accepted and make sure you get a minor in either philosophy or economics and you’ve got a full ride… just get accepted”). And so now that’s behind you.
Given that daydreaming about winning the lottery is the best part of spending the two bucks, let’s try to save you the math fee and give you some of the endorphins. Let’s say you buy a ticket. Let’s say you win. And let’s say that you’re the only person who has the winning numbers.
So… what would you do if you won the lottery?
(Photo is “Comfy Chair at Big Lots” by osseous. Used under Creative Commons License.)