MYGA
A higher fixed rate than a bank CD, with your principal untouched
A set term at a set rate. Think of it as the upgraded version of a CD.
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A MYGA (Multi-Year Guaranteed Annuity) locks in the rate you agree to at purchase and holds it for the entire term.
It looks a lot like a bank CD. The big difference is that tax on the interest is deferred until you withdraw.
- Fixed rate Unchanged for the whole term
- Tax deferral Interest is not taxed until withdrawal. The biggest difference from a CD
- Principal protected Your deposit holds regardless of market falls
- Converts to income Can become lifetime income at maturity
Decide the goal first
If the goal is income that lasts for life, it pays to look at income designs from the start. You avoid an unnecessary surrender cost later.
- A CD is maturing You are looking for better terms for that money
- Principal comes first You want to avoid loss entirely
- Money you can set aside Funds you will not need for several years
