6
Understand what the number on the sign is not
The headline is the annuity. The cash option is about half. Then tax.
~50%Roughly what the cash option is, as a share of the advertised annuity.
A billion-dollar jackpot has a cash value around half that. Federal tax then takes the top bracket on essentially all of it, and state tax takes between nothing and double digits depending on where you bought the ticket and where you live.
A useful mental model: halve the sign, then take roughly another third off. That is not precise and your CPA will do it properly, but it stops the first conversation being a shock.
Annuity versus cash is a genuine question with no universal answer. The annuity is protection from yourself and from everyone who will ask; the cash is control and the chance to invest the difference. What is not a question is that you should decide it with the CPA rather than in the car park.