Multi-Year Guaranteed Annuities

Multi-Year Guaranteed Annuities (MYGAs) are the annuity equivalent of CDs, offering a fixed interest rate for a guaranteed period. How MYGAs Work You make a single premium payment and the insurance company guarantees a fixed interest rate for the entire term (typically 3-10 years). Interest rate is locked in at purchase Interest compounds tax-deferred At maturity, you can withdraw, renew, or annuitize MYGA vs. Bank CDs Feature MYGA Bank CD Rates Often higher Lower Tax Deferral Yes No FDIC Insured No (State guaranty) Yes (up to $250K) Early Withdrawal Surrender charges Interest penalty Free Withdrawal Provisions Most MYGAs allow penalty-free withdrawals of up to 10% annually, providing some liquidity while keeping the guaranteed rate on the remaining balance. MYGA Laddering A popular strategy is to "ladder" MYGAs with different maturity dates, providing: Regular access to funds as MYGAs mature Protection against interest rate changes Flexibility to reinvest at potentially higher rates