If you have 15 minutes and you’re interested in a MYGA 101 course, you’ve come to the right place.
The above video dives into the following topics regarding MYGAs:
1. What is a MYGA?
To start, the video defines MYGA: a multi-year guaranteed annuity. Specifically, it’s a type of fixed annuity with a guaranteed interest rate for a set period of time.
2. What type of annuity is a MYGA?
The video explores the various categories of annuities, such as accumulation annuities and income annuities. MYGAs, along with variable annuities and indexed annuities, are a type of accumulation annuity. The similarities and differences between these annuities are explained.
3. How does a MYGA work?
A 5-year MYGA with a 3.15% return is used as an example. We see the benefits of true compounding interest and tax deferral as a MYGA account with a $100,000 premium increases in value to over $116,000 over five years.
4. What are the pros and cons of MYGAs?
The video explores the pros and cons of MYGAs. Some of the potential pitfalls of a MYGA are identified, such as surrender charges, market value adjustments, and the age 59 1/2 rule. On the flip side, MYGAs enjoy no market risk, high interest rates, and tax deferral.
5. Who should buy a MYGA?
There’s an inherent time commitment with a MYGA: 3 years, 5 year, 10 years, etc. Be comfortable with that commitment. The video also explains the importance of determining when you intend to use the money in a MYGA and how the answer is important in deciding whether or not a MYGA is right for you.
6. How do you purchase a MYGA?
An annuity is technically an insurance policy. A MYGA should be purchased from a licensed insurance producer, hopefully one specializing in MYGAs. The video explains the importance of shopping around for the best rates and the best rules for your situation.
An in-depth look at Multi-Year Guaranteed Annuities (MYGA).
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