The Annuity Man

Multi-Year Guarantee Annuities (MYGAs) are the annuity industry's version of a CD (Certificate of Deposit).  Both fully protect your principal from loss.  Both have no annual fees or moving parts.  Both contractually guarantee an annual interest rate and allow you to choose the contract's duration.  Both are what I call "safe money" products.

The primary difference between a MYGA and a CD is in a non-IRA (i.e. non-qualified) account, the interest from a MYGA grows tax-deferred.  With a CD in a non-IRA account, that annual interest earned is taxable.  In a Traditional IRA or Roth IRA, both MYGAs and CDs function the same and are taxed the same.

Typically, MYGAs have a higher interest rate guarantee than CDs if the duration is 3 years or more.  CD usually have a higher interest rate guarantee than MYGAs when the duration is from 3 months up to 3 years.  Because of these contractual "sweet spots," MYGAs and CDs can be efficiently used together for laddering strategies in order to obtain the highest contractual guaranteed yield for specific time frames.

MYGAs and CDs are both commodity products.  MYGAs should be shopped through all carriers to find the highest contractual yield possible.

Contact Stan The Annuity Man to get Stan's MYGA Owner's Manual book for free an under no obligation.  Also go to his site to see a live feed of the best MYGA fixed rates for your specific state of residence and to use his proprietary annuity calculators for the best quotes for all annuity types.

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