Multi-Year Guaranteed Annuities

A Smart Alternative to Bank CDs

As retirement approaches, many people want to reduce their exposure to the stock market. Often, they move their savings into bank CDs for security. While CDs are a solid choice, there are alternatives that may offer higher interest rates with similar protection—one of them being Multi-Year Guaranteed Annuities (MYGAs).

MYGAs function similarly to bank CDs but are offered by insurance companies. They provide a fixed interest rate for a set period, often at a higher rate than traditional CDs.

How MYGAs Work

1. Make an Investment

You invest a lump sum (typically a minimum of $10,000 and a maximum of $1 million).

2. Choose a Term Length

The insurance company holds your money for a fixed period, usually 2, 3, 5, 7, or more years.

3. Commit to the Term

Early withdrawals may result in penalties, so it’s important to choose a term that aligns with your financial goals.

4. Set Beneficiaries

You can designate beneficiaries to receive the funds if you pass away during the term.

5. Receive Your Payout

At the end of the term, you can withdraw your principal plus interest or reinvest in a new MYGA.

6. Enjoy Tax Advantages

MYGAs offer tax benefits unique to insurance products.

7. Flexible Funding Options

MYGAs can be set up as a rollover IRA or as a non-qualified account (not part of an IRA).

Why MYGAs Might Be a Smart Choice for You

Which are the benefits of a MYGA?
- Higher Interest Rates – Often 0.5% to 1.5% higher than bank CDs.
- Rate Lock-In – Once you secure a MYGA, your rate is guaranteed for the full term.
- Secure & Reliable – MYGAs are issued by insurance companies, providing a dependable option for stable growth.
Can MYGA Rates Change?
Rates can change at any time before you purchase a MYGA. However, once you have a contract with an insurance company, your rate is locked in for the entire guarantee period.
Is a MYGA Right for You?
If you’re looking for a secure, fixed-rate investment with tax advantages and a higher return than a traditional CD, a MYGA may be a great option. However, it’s important to carefully consider the commitment period and ensure it aligns with your financial plans.

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