When I was younger, I would have taken the Annuity. If I won a jackpot, I would not be obsessed with getting rich, as I would ALREADY be rich. All I would have to do is avoid disaster and stupidity.
These days, I'm torn, although I would love to have the opportunity to agonize over the decision!
Why I like the annuity: 1) A PB jackpot is guaranteed by the member states, so even if the underlying annuity investment failed, they would fulfill the contract. More than that, the investments used are obligations of the US government, and they will not default unless the world and the country has come to an end. Even more, state lotteries are cash cows, and if they stopped paying, people would stop playing: It won't happen, even if the state defaults on some of its' other obligations. 2) With the annuity, I would never have to even think about money, as I know exactly when and how much my minimum income will be for the next 29 years. And I wouldn't spend it all so I could still invest the excess.
Why I dislike the cash option: 1) When you take the annuity, the state takes the Cash jackpot and invests it before taxes. When you take the cash option, you will be left with the Cash jackpot AFTER taxes, leaving much less to invest. 2) When you take the cash payout, you have to put it somewhere. If I'm already rich, I wouldn't want to take the risk. Envision the scenario: You get the cash and invest it broadly, and the next day terrorists explode dirty bombs in financial centers around the world. Stocks crash, companies go broke and can't pay on their bonds, and the $100,000,000 you've put into CDs are over the insured limits because you can't find enough banks to split it up. 3) If you hide it; not really practical for safety reasons. And imagine $100 mill in $100 dollar bills, or gold, etc.. And how much of your time and energy do you want to spend guarding a pile of money?!!! 4) If you need the income to live on and invest it, you will be watching the market every day, spending your life managing your money. What a WASTE of a life that could be filled with adventure!
FOR ME, I want to spend my wealthy days living, not managing my money. I don't even want to waste a moment thinking about money. The annuity is safe and easy.
One wild analogy: Say you were in a spacecraft, and the systems on board provided twice as much oxygen as you would ever need. Then your companion on board says they can modify the system to provide 10 times that amount of oxygen, but there is a .002% chance the system will be destroyed and never work again. Would you be willing to take that chance?
I can only drive one car, sleep in one house, or play one golf course at a time. I don't need more more, more. The minimum MM or PB annuity would provide me with more than I need, so I would be unwilling to take even the smallest investment risk.
Your dreams (or paranoia) may be different, so your choice might be different, but the annuity is a reasonable choice.