Powerball/Megamillions cash prize is now 80% of the Annuity option (instead of ~50%)

[JEDI]

saw a losing Powerball ticket on the floor at the office.
What caught my eye was Jackpot $101M (Cash $81.6M).

I always thought the cash option was about 50% of the Annuity.
Wonder when did that change? and why? (Google has failed me because it sucks searching if one of the terms is '80%')

 

[LikeLinus]

saw a losing Powerball ticket on the floor at the office.
What caught my eye was Jackpot $101M (Cash $81.6M).

I always thought the cash option was about 50% of the Annuity.
Wonder when did that change? and why? (Google has failed me because it sucks searching if one of the terms is '80%')

Edit - It appears what they take off the top is actually the Federal Taxes, but only the 24%. There's no penalty for taking the lump sum. It's just that you are paying the below at once.

Federal taxes are taken out immediate at 24%. Then you pay state taxes. Then you owe the remainder of the Federal taxes when you submit your taxes in April. That's the remainder of the 37% (highest tax bracket) minus the original 24%.

https://www.cnbc.com/2019/03/24/if-you-hit-the-750-million-powerball-jackpot-heres-your-tax-bill.html

 

[allisolm]

That amount does seem high for the cash option. It was right around 60% but my husband says it has been higher for the last several weeks. He doesn't remember exactly when they started.

 

[Grey_Beard]

The cash price is the present value of the future cash flows (the annuity payments). When interest rates are high, present value is low. When interest rates are low, present value is high. This is the impact of the change in interest rates since March. A small move in the interest rate, creates large swings in present and future values.