I would take the annuity if it were that big of a jackpot because after the first year I would be set for life anyway, all the other checks would just be icing on the already big enough cake. So it would not matter. Although I highly doubt anything is going to happen to the annuity and I doubt the tax rate is going up to 90% again, that was like one time back in the 40's I think. Look how much they make from PB and how successful it has been for so long. It just keeps getting higher and more successful over time and now we got billion dollar jackpots. You also do not have to worry about where you are going to put a huge amount or risky investments falling through. I would decide though once I won. It is "guaranteed" and that means they are legally bound via contract to pay the annuity. you also have less taxes as you are not in the top percent if the annuity is smaller. So you get more in the end.
From the Powerball site.
"CASH VS. ANNUITY - MY FINANCIAL EXPERT SAYS HE CAN EARN MORE THAN THE ANNUITY WITH THIS CASH.
Maybe. We have seen that even financial experts forget about taxes. From the example above, if the winner takes the cash, then the winner will have to pay state and federal taxes on the cash amount. The amount of income tax will vary, but it will likely be somewhere close to half the cash amount (counting federal and state taxes). With $50 million as a cash prize, a cash winner will have less than $30 million to invest. We don’t pay any income tax and so start out by investing the whole $50 million. You should note that the maximum federal tax rate is pretty low right now and may go higher in the future. Interest earnings are also near historic lows. There is not a completely right answer. The right answer for you will depend on your age and your financial discipline.
Sometimes financial experts also do not understand how the annuity prize is paid out. We do not hold the prize for 29 years and then pay it all out. The Powerball annuity prize is an annuity stream. The winner gets the first payment immediately and then an annual payment for the next 29 years. And this is guaranteed. It is possible to beat this income stream, but not without risk. Deciding how to take the prize can be a complicated decision, but it is an important one that deserves your attention. You have 60 days, after you claim your ticket, to make the decision. Get lots of advice and ask these kinds of questions.
"The word "guarantee" is certainly overused from time to time, but if it can have any meaning in the English language, then it can be used with the Powerball jackpot. You can imagine some instances where even a Powerball jackpot will not continue:
(1) A meteor strikes North America, wiping out all life.
(2) The U.S. government is overrun by [insert name of feared enemy here].
Short of these events, the Powerball annuity prize will be paid on schedule. What we actually use for our investments is not important; the Powerball prize -- which pays a graduated annuity, rising at 4% per year to keep up with inflation -- is a contract between each of the lottery members (the states) and you. As long as the U.S.A is in business, you will be paid. If the U.S.A. fails, then you will have other things to worry about."
