They don't have as much time as it seems
By Kate Northrop
A crucial deadline for claiming the record-breaking $1.337 billion Mega Millions jackpot drawn in July is approaching for the single Illinois-based lottery winner.
The lone Illinois winner of the unimaginable $1.337 billion Mega Millions jackpot is only weeks away from a major deadline that could have a huge impact on the amount of money they get to walk away with.
"For a prize of this magnitude, it's not unusual for the winner to take a while to claim," Illinois Lottery Director Harold Mays said in early August. "I'm sure they're going through a range of emotions."
If the winner wishes to claim the prize as a lump sum, however, they better get a move on. Mega Millions winners in Illinois get one year from the draw date to claim their prize, but only as an annuity. The prize can only be claimed as a lump sum within 60 days.
The final day to claim the jackpot and take home the one-time lump sum of is September 27, 2022. If no one steps forward by then, the prize will default to the annuity option.
"They have a choice that will be made for them if they don't make it," Susan Bradley, founder of the Sudden Money Institute in Palm Beach Gardens, Florida, told CNBC.
According to USA Mega, the cash option is worth $780.5 million, with the total take-home in Illinois coming to $453.12 million after federal and state taxes are deducted.
There are advantages to claiming the prize as either a lump sum or annuity depending on the winner's situation and preferences. The cash option is taxed more heavily than if you were to receive the full annuity prize, however you receive a massive amount of money right away versus annual payments over 29 years.
"Some people say take the lump sum because you manage it instead of the state," Bradley continued. "But that's loaded with all sorts of responsibilities that people can't see coming."
Those who feel they could potentially be overwhelmed by the sudden influx of unfathomable wealth might opt for the annuity option to ease the burden of planning their spending, investing, philanthropy, and gifting goals.
Bradley recommends that, even if a lottery winner chooses the annuity option, there should still be a plan in place for when the 29 years of payments are up.
"They should have a replacement fund," she advised. "Assume 50% of the annual payment is yours after taxes. Then split it in half again and put half in your replacement fund."
Here is what we would do if we won that much money.
The winning ticket for the $1.337 billion Mega Millions jackpot was sold at Speedway #4250, located at 885 E. Touhy Ave. in Des Plaines.
One facet of winning a big jackpot that this winner does not have to worry about is revealing their identity. It's likely that we'll never know the winner's name, because Illinois allows lottery winners to remain anonymous for prizes of $250,000 or more.
"We will work closely with the winner to respect any wishes for privacy and support them in any way we can to provide a positive winning experience," Mays said in a press release last month.
Wonder how many states require players to choose annual payments vs annuity? Time this was shelved and let them decide when claiming the prize.
Maybe 15 years ago or so when you purchased a ticket for the big boys in KY you had to decide right then and there which route you wanted. Glad they got rid of that...maybe the advent of self service machines years later dictated this needed to go?
In Texas we have to choose when buying the ticket if using a playslip. If a retailer prints a ticket from the computer (a QP) it automatically chooses the cash value prize unless the annuity is requested.
Interesting options this winner(s) has:
1. Complete anonymity
2. Cash Lump Sum Always the best (imho)
3. Annuity https://www.usamega.com/mega-millions/jackpot/annuity/il/2022/7/29
Starting with the 1st payment of $11.71 Million AFTER state and fed taxes are paid, then going up. Payment # 15 would be $23.16 Million take home (provided taxes stayed at the same rate). The final take home payment of $48.12 Million ( If taxes stay the same in 29 years).
Lots to ponder for this/these winner(s)...... Congratulations on the newly soon-to-be acquired wealth and best of luck with your decisions.
I would always prefer the lump sum but I definitely would not trust a state like Illinois for the annual payments. It wasn't that long ago that they were giving you an IOU for any winnings over $600. And the state government there has been corrupt for a long, long time. They even have a saying there that all their Governors serve two terms, one in office and one in prison.
Why are the taxes higher when taking the lump sum?
Wouldn't the annual amount put a winner in the highest tax bracket every year?
Seems like that ticket is lost. If they hit for that big amount, what are you waiting for? Very Unfortunate
Counting Down to Feast or Famine!
Have you forgotten that CA couple that waited until the very end to claim their share of a multi-billion $ prize?
This might be the same case too. July 2023 is still a way off...give it time.
a closed loved one of mine,
in Killeen, Tx., was saying something about that. just wanted to say that today.
This is a very sad thing, if the woman does not claim it. (or man) because I'm one who is in her late 30s, so basically tipping on middle age." I would want LUMP SUM if my child age, she 20, and early 20s both girls. or, if i was middle age already mid 40s fifties, and up i would still want LUMP SUM. I am one who do not trust any gov't with my
'annuity" pay etc., nope. would want it, only in 1 big juicy nice LUMP SUM.
Claim the money now! Lump sum ,, buy an annuity. Put the money to work for you. The money isn't doing any good if it's not claimed.
Have we ever seen a winner take the annuity vs a lump sum for a major win of $200 million plus? I cannot recall any. I am wondering if the ticket was lost, not checked, etc.
Kate......I have seen a lot of videos offering advice on what to do if you suddenly become a multi-millionaire, but I must say yours was the best. You kept things simple and explained the reasons behind your advice, instead of just giving advice. Hard to believe this is the first time I've watched that video. Thanks.
So what happens if it isn't claimed at all!?
If a jackpot prize goes unclaimed, each participating state in the Mega Millions game will get back all the money it contributed.