Virginia Man Wins Jawdropping $384M Jackpot: Should He Take the Lump Sum or Annual Payout?

A Mega Millions player in Virginia won the £254 million ($348 million) jackpot last week, marking the largest Mega Millions win in the US state's history. The ticket was sold at the E & C VA convenience store in Burgess, and the winning numbers were 18, 21, 29, 42 and 50 with the gold Mega Ball 2. The odds of winning were 1 in 290,472,336.

Virginia has witnessed 10 Mega Millions winners since the game's inception in 2002. Former truck driver JR Triplett previously held the state's record of winning £174 million ($239 million) in 2004.

The latest drawing marks the fourth time the game's jackpot was won in 2025 and the second since the format changed on April 8. The new format created larger prizes for all non-jackpot tier winners and offered better odds of winning the jackpot, but ticket prices were increased to £3.65 ($5) from £1.46 ($2) previously.

The unidentified winner can receive the total £($348 million payout under the annuity option that pays out a fixed amount yearly over 30 years. In the case of a one-time lump-sum payout, the person stands to walk away with a £113 million ($155.5 million) cash pile. However, the winner must decide within 180 days to claim their winnings.

One-Time Cash Out or Staggered Payments Over Decades?

The annuity option is the only way to receive the full jackpot winnings, as the total amount of the lottery prize is calculated based on the winner choosing this option. The base amount is invested on your behalf, and you earn interest on it for almost three decades.

Meanwhile, a lump-sum payment would mean settling for only 50% of the winnings or even less because 24% of the jackpot will be claimed by the Internal Revenue Service upfront. State and local taxes could take up an additional 13%. In Virginia, the Lottery Department withholds winnings at a 4% tax rate for prizes above £3,650 ($5,000).

A lump sum payment might also subject the winner to the highest federal tax rate of 37%, which could mean you owe more to the authorities at the time of filing your taxes. Note that your entire income isn't taxed at the same rate since the federal tax system is tiered, meaning that different parts of income are taxed at different rates.

Staggered payments can help winners manage their money better and avoid impulsive spending. Prize winners, who are inherently not wealthy, can find it overwhelming to manage large cash amounts. Lifestyle creep is a common issue where spending increases as income rises. Finding the right way to balance finances during a major lifestyle upgrade is crucial to ensure winnings can last a lifetime.

However, a one-time payment can help one immediately clear debt, fulfil financial aspirations, and offer more control over the total winnings.

Financial experts, such as Shark Tank's Kevin O'Leary, believe that the one-time payment option is the best decision. He suggests winners take the cash and invest half of it in an annuity for monthly income while investing the rest in stable dividend-paying stocks for passive income and capital appreciation. Several experts concur with his views that investing money under the guidance of a fiduciary financial adviser could generate more money over time.