Which is better: cash or payments?

Use this calculator to help determine whether you are better off receiving a lump sum payment and investing it or receiving equal payments over time.


This tool compares two payment options: receiving a lump sum today, invest it yourself, and live off the proceeds after paying income taxes; or receive an annuity for a specific number of years and pay taxes each year. Lotteries are often paid as annuities.

The calculator discounts the annuity to a present value so that you can compare which option is the better deal. Generally, the option with a higher present value is the better deal. The savings interest rate that you designate is used to calculate present value for the annuity payment option and is compounded monthly.

The decision between cash up front and payments over time mostly depends on the interest rate that you can earn on money that you save and the difference between the lump sum amount and the annuity amount.