June 5, 2016 by Brad Gunning

What are the Pros and Cons of MYGAs?


myga annuityWe have had a tremendous amount of inquiries regarding Multi-Year Guaranteed Annuities (MYGAs) in the last year. The recent enthusiasm for MYGAs is the result of the sustained low-interest environment we’ve found ourselves in. Below are some of the pros and cons of MYGAs, followed by our recommendation.


Pros of MYGAs:

  • Safe
  • Better interest rates than Certificates of Deposit (CDs)
  • Backed by large insurance companies, for instance A+ or A rated
  • Tax deferred (whereas with a CD you pay taxes on the interest each year)
  • Most offer 10% free withdrawals each year
  • Nearly all offer interest withdrawals each year
  • Many offer annuitization


Cons of MYGAs:

  • Time commitment, for instance 3, 5 or 7 years
  • Surrender charges if you decide you want to withdraw prior to end of the period
  • Possible market value adjustment (MVA)
  • Not FDIC insured, whereas CDs are
  • 10% tax penalty for withdrawing prior to age 59 1/2


Recommendation on MYGAs

If you are comfortable with the time commitment and these are funds you intend to use after age 59 1/2, then a MYGA is a great way to earn a better interest rate.




The Standard, MetLife, Principal Financial Group, Genworth, & Lincoln Financial Group