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Anyone Considering Fixed Rate Annuities (MYGA's)?

DarbyBoy
  |     |   3 posts since 2019

As it is becoming more difficult to find longer term CD's for my ladder, I wonder why the community here is not talking more about the possibilities of fixed rate annuities. These so called MYGA's (Multi Year Guaranteed Annuities), which I think used to be called "CD Type Annuities", seem to be a viable alternative to my portfolio. While I have personally had a negative prejudice towards Annuities, my recent interest was sparked when my Brother-in-law told me about a fixed annuity he just purchased. Here are some of the things I was surprised to find out once I started researching:

- Fixed rate MYGA's return rates are running higher than many CD investments.

- The ones I have researched have no fees to the buyer (seller/agent gets commission from Insurance company).

- Taxes may be deferred

- Interest earnings may be distributed once a year, (then it becomes taxable).

- No penalties if holder withdraws up to 10% of principal per year (more than that and heavy penalties apply!)

- Full principal returned to buyer at end of term (or can be rolled into another innuity).

- Downside: Not FDIC protected, but do have limited protection imposed by individual states.

Any thoughts would be appreciated.

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Answers
Anon456
  |     |   249 posts since 2011
I have not seen ones that compete with the BEST CD rates, but maybe you have better sources. Where have you seen good ones that can be researched. Biggest problem I have found is also the term. Most I have seen are 10 years or longer. Not doing those unless the rates were REALLY good.

Would love to find other fix rate of return options with 3-5 years to maturity, that comes back to cash out at that time.
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Anon456
  |     |   249 posts since 2011
FYI - have done some alternatives such as bonds or muni, but picky about the source. I do not do Puerto Rico bonds, schools, hospitals, special events facilities ...... so it narrows it down quite a bit.
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DarbyBoy
  |     |   3 posts since 2019
Yes. So it is very difficult to find sources that enable an individual to do their own research, but here's a source I found worthy of checking out.

https://myga.direct/quote/

The devil is in the details with these things and picks should only be from reputable Insurers:
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