Follow The Money-Brick Road!

We don’t know who they are yet, but Iowa’s Lotto America® jackpot winner from this weekend definitely has folks buzzing!

You’ve likely heard by now that a ticket purchased in Dubuque won Saturday’s Lotto America jackpot of $40.03 million annuity, $21.28 million cash option. That's the largest prize ever offered in the Lotto America game.

People have asked us which option is better when claiming a jackpot prize: annuity or lump-sum. And that answer truly is up to the winner involved – they get to choose. That’s why we always suggest that our winners consult a trusted financial advisor or lawyer to make plans for their winnings before they step forward to claim the prize.

What do the two options look like for this jackpot?

If the Lotto America jackpot winner chooses the annuity option, they’ll receive 30 payments over 29 years. The money on hand from the sale of tickets for the jackpot would be invested, which would generate interest over time. The initial amount of the investment plus the interest earned over all those years would add up to $40.03 million.

The annual annuity payments to the winner would increase over time to accommodate for inflation. The first payment would be a little more than $600,000, while the 30th and final payment would be about $2.48 million. The first annuitized payment would be made when the prize was claimed, and the other payments would be made on the anniversary date of the claim. Withholding would apply to each payment, with a current federal rate of 24 percent and state rate of 5 percent.

If the winner chooses the lump-sum option, they’ll receive a one-time payment of $21.28 million before taxes. Federal withholding of 24 percent ($5.1 million) would automatically apply to that total, along with state withholding of 5 percent ($1.06 million). The Iowa Lottery would make a net payment of $15.1 million to the winner by wire transfer.

Please check your tickets!

As we wait for someone to present the jackpot-winning ticket, we at the Iowa Lottery remind our players to check their tickets for any prize they may have won, not just the jackpot. There are nine prize levels in Lotto America ranging from $2 up to the jackpot. Your ticket may have won at one of the lower levels, even if you didn’t win the grand prize.

We’re getting ready!

We’ve had fun this week prepping for our winner to come see us at lottery headquarters in Clive.

As you can see from the images here, we made a “money brick road” that the winner can follow in our auditorium as they make their way to the stage. Hey, this kind of thing will likely only happen once in a person’s life, and we want the winner's jackpot claim to be a fun and memorable day!

P.S. From the size of the bills involved, you can probably tell that our road is made of fake money, right? But it still makes you smile and that’s the whole point. :)

Comments

[Mary Neubauer]

Hi, Beverly. Please read the details about the two prize options again. The cash amount is NOT the annuity amount minus taxes. The difference between the two amounts is the interest income that would be generated over the 29 years of annuity payments. When you choose the cash option, you receive one lump-sum payment, so the interest amount is not involved. The withholdings that apply to lottery winnings are designed to cover the tax liability for the prize, but the exact amount that a winner will owe in taxes is dependent on their circumstances outside of winning the lottery. That is why the Iowa Lottery always suggests that its winners consult a financial advisor or lawyer who can help them determine the details involved in their instance.

[Beverly Jester]

IF YOU ALREADY TOOK THE STATE AND FEDERAL TAXES OUT OF THE $40 MILLIONAND LEAVES $21 MILLION, WHY DO THEY HAVE TO TAKE TAXES OUT AGAIN WHEN THEY REPORT TO THE IRS NEXT YEAR? THAT SEEMS LIKE DOUBLE TAXATION???

[Mary Neubauer]

Hi, Mary. Once a prize is claimed, the money always belongs to the winner! If a winner chooses the annuity option and passes away before the final payment has been made, the payments would continue to go into that person’s estate according to the terms of the estate or a court order, whichever applied in that instance.

[Mary Kennedy]

What happens if the winner opts to take the annuity option and passes away before the 30 payments have been made? Do the beneficiaries get the money or does the Lottery keep it?

[Diane Riedl]

Store that sold the ticket should get more $$ as a reward