After more than four months of building, the Mega Millions jackpot finally went out Friday night. The multi-state lottery announced a couple hours after its 11 pm ET drawing that one ticket won the $1 billion prize.
The winning ticket was sold at a Kroger supermarket in Novi, Mich., a Detroit suburb, according to the Michigan Lottery. Its holder can choose between taking annual installments over a 29-year period or a cash option of $739 million.
After taxes, that would out to about $530 million.
The $1 billion jackpot was the third richest lottery prize in US history and second-biggest for Mega Millions. The largest was a $1.54 billion prize won on Oct. 23, 2018.
The winning numbers were 4-26-42-50-60 and the Mega Ball was 24.
It had been 37 drawings since the Mega Millions top prize was last claimed, the longest drought in the game’s history.
Initially forecasted for $970 million, the Mega Millions jackpot hit the 10-figure mark thanks in large part to a $731 million Powerball prize going out on Wednesday.
Cash Value Versus Annuity
In most cases, when lottery jackpots reach astronomical figures, winners choose the cash option. While its millions less, it provides the winner with certainty.
As Mike Savage, CEO of 1-800Accountant, notes, the government taxes money upon receipt.
Right now, federal income taxes are low from a historical standpoint — and it’s impossible to know where they may be years from now,” Savage said. “This means that from a tax perspective, it could cost you more to take the annuity because tax rates are more likely to increase down the road than decrease.”
However, annuity expert Stan Haithcock contended at thebalance.com. The annual payment option offers a variety of protections for winners.
First, the annual payment is guaranteed income, and the smaller checks can help people better manage their money and reduce impulsive decisions.
According to information from Mega Millions, a $1 billion winner taking the annuity would receive $15 million this year. Each subsequent payment would be 5 percent bigger. So, the final payment in 2050 would be roughly $61.7 million.
Ten Win At Least $1 Million
Besides the jackpot, Mega Millions also awarded 10 $1 million prizes for people who matched the first five numbers. Two of those tickets will get $2 million as they included the optional Megaplier in their purchase.
Of those 10 tickets, two were purchased in New York and two in Florida. The remainder were bought in Maryland, Missouri, New Jersey, and Pennsylvania, with the $2 million prizes going to tickets in North Carolina and Virginia.
Since the jackpot last went out on Sept. 15, 70 prizes worth $1 million or more were won.
In addition, Friday’s drawing also made 187 players at least $10,000 richer four matching four of the five numbers as well as the Mega Ball. That inlcuded 31 winners who played the Megaplier and won $20,000.
The Mega Millions jackpot now reverts back to $20 million, or $14.7 million cash option, for the next drawing on Tuesday.
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