Multi-Year Guarantee Annuity Definition - YouTube

Okay. So you must be a CD buyer. Are you a CD buyer? You have to be a CD buyer, right?

Because if you're not... No, if you are, then you're going to love multi year guarantee

annuities. So, that's kind of what you're looking into. You've heard about it. You

haven't heard about it the bad chicken dinner seminar because the commissions

on multi here guarantee annuities. And from here on, let's just call them

MYGAs. That's the acronym.

MYGA Commission's to the Asian are very very low. And that's the reason that

there are new. I guess if they did a bad chicken dinner seminar on MYGAs they

would just serve coffee because they couldn't afford to do anything else. That

alone should tell you the value of the product. MYGAs' or the annuity

industry's version of a CD. So, when you see all these cats out there saying, "I

hate all annuities. Annuities are all expensive. Annuities are all bad."

Annuities most of them are very simplistic. Most of them have no annual

fees and for this specific one, they'll take your guarantee annuity. Myga,

it functions similar to a CD. In other words, you have a guaranteed annual

interest rate that's contractual for a specific period of time. Sound familiar?

Yeah. That's how a CD works. So, we're going to go through all of that

information about multi year guarantee annuities. Compare them to CDs and you

know, one's not better than the other they just kind of work together. MYGAs

have a different benefit proposition than CDs. And then at the end if you hang

in there with me and I encourage you to do so, then I will send you this. A

multi-year guarantee annuity owners manual. And yes, there's enough

information on the product to write or short book on it. Which I did because I

won't like clients to be informed on what they are getting, okay? And if you

want to see the best MYGA rates in the country go to stantheannuityman.com

and we have a live feed of the best mega rates available in your state. Because MYGAs

are regulated at the state level, fixed annuities are. And so each state

has MYGAs that are approved for their state. You can go look. And see you pull

up the state, pull up the duration you're looking at. You're looking to to invest

in so in other words you're from Texas. You pull up Texas and say i'm looking

for 5 year, right pull up 5 years. And then magically it will appear all of

the top guarantees in the country. So, hang in there with me and i'll tell you

how to get the book at the end of the video. Okay. So, I said before

that MYGAs are like CDs. What's the difference? Here's the primary difference.

With a CD in a non IRA account, like a non-qualified account, you have to pay

taxes on that interest that you earn every year. With a MYGA and a

non-qualified account, it is a tax deferred interest compounding. Some

MYGAs have simple interests must have compounding interest. But you don't have

to pay taxes on the interest annually. Now eventually, you do have to pay taxes

when you bring the money out. But there's a lot of people out there that say, "Hey, I

just want safe money I don't want to lose a penny. And I want just an interest

rate." Okay, great. Let's look at my guess and CDs, which one's better? They're

both good, okay? If your CD buyer you like MYGAs and if you're looking... It really

comes down to duration. I don't sell CDs but I think they're fantastic. They

perform the same function that MYGAs. Do they provide an interest rate. If your

time horizons like one to 2 years or 1 to 2 and a half years then you

need to buy CDs they're going to provide the highest contractual rate. If your

time horizon is say 3 years to 5 years or more. So 3 to 7... 3 to

10. Then a multi-year guarantee annuity, the majority of the time is going to

provide the highest contractual annual yield. So, how would we use them together?

I would do a what's called a fixed rate ladder. So, I don't sell CDs. If you want

to go find the best CD rates, go to bank rate.com. Best migrate standtheannuity

man.com. So, you'd say, "Okay, I've got $500,000 example and I

want a 5 year fixed rate ladder. What would I do?"

Well, you'd buy a one-year CD, a two-year CD, a 3-year MYGA, 4-year MYGA,

5-year MYGA. That would be an example of a fixed-rate ladder using both

products. Now, if in an inside of an IRA both are tax deferred. But if you're if

you're looking at outside of an IRA non-qualified, then that's kind of where

MYGAs might really play a role with your planning in your safe money

planning because that interest is taxed deferred.

So, that's kind of the primary difference. Benefits and limitations. You know, that

is the primary benefit the tax deferral of a MYGA. You know, it's no annual fees, no

moving parts. No market attachments, easy to understand. Limitations would be... Let's

just say for example if you bought a 5-year MYGA and you said, "Stan, I want

to get in your in year 3." And you want to get all your money back because

something changed in your life. The surrender charges are pretty predatory

during that 5-year time period. You know, once you're past the

5-year time period, there's no surrender charges, etc. So, that would be a

limitation. The other limitation a lot of people want specific carriers to offer

MYGAs. And some do, some don't. You have to go to the feet at Stantheannuityman.com

and see for yourself who's offering them in your state. But some carriers

just choose not to offer multi year guarantee annuities. So, that's kind of

the benefits and the limitations. Okay, a couple more details that you need to

know about MYGAs. Number one, some of the MYGAs allow you to peel off

interest. So, if you said, "Stan, I want to protect the principle but I want the

interest to come out every month and go into my bank account." Some do, some don't.

You just have to on the mega feet of StanTheAnnuityman.com. You can filter

that and see which ones do and which ones don't.

In addition, there's not a lot of inventory for MYGAs under the 3

year duration right now. There's a couple that have like a one year. But if

you're going to buy a one year piece of paper with a guarantee, you probably

should buy a CD. Go to bank rate.com to look at that. Or your local banks. You

know, heck just shop it. You know it's like a commodity, it's a commodity

product. But typically, the inventory starts at the 3-year level. There's a

lot of 5-year level nagas available. And you can go as far out as 10 years

plus. I wouldn't advise that at the time of this taping. I would tell you, you know,

5, maybe 7, years would be tops that you want to lock in. So, you know,

just put that in mind the yield curve valuations and all of that stuff. In

other words in English, what they're not rewarding you to lock in

longer than that. Got a call the other day and this this will answer probably a

question that's in the back of your mind. Guy said, "Well, I'm okay with the MYGA, I

like the MYGA. But what happens at the five-year point.." He's in my 5-year MYGA.

"What I was at the 5-year point, if I don't want the money? You know, I don't

want you to send me the money." Well, here's what we do. IRS rule number is 10-35.

That's the section 1-0-3-5. You can do an annuity to

annuity transfer. And it's a non taxable event. So, in a non IRA setting, you know, I

told him you know at the end of 5 years what we would then go and do is

shop for the highest rates if he wanted to go to another 5 year, the highest

rate. And we would transfer from one annuity to another annuity non-taxable

event and hockey analogy. For all you hockey people out there. Just pushing

that tax puck down the ice, eventually you have to pay taxes when you take the

money out. But if you want to keep deferring and keep rolling the annuities

and it be a non-taxable event. You can do that via the IRS 10-35 rule. If you're

very bored and you want to read that it's IRS section 10-35. Now, if the MYGAs

inside of an IRA you can obviously transfer IRA to IRA and it not be a

taxable event as well. So, that's a lot of information thrown at you. Okay. So, we

covered a lot about MYGAs. So, I do encourage you to go and look at this

video as well. deferred income annuity pros and cons. People ask me a lot about

deferred income annuities. I really dig into that. So, that's a video you might

want to look at. Let's talk about the book. I promise you the book. I'm going tO

send you the book. MYGA owner's manual. Do me one favor. First, click that subscribe

button because I'm putting out a ton of these videos they're very informational.

Hope you've enjoyed them. If there's any that you want to see that I'm not

covering, type it in the comments box. Be nice. No yelling at me, I'm doing the

best I can with these videos. So, type in the comments box for what you want me to

cover and I'll try to get to that since we're putting out a ton of these. So, if

you go to the stand the annuity man description down below this video, you'll

see the words "show more", "more info" or something like that, click that and

there'll be a drop down from that that will show

a link that says get my annuity owner's manual. Now, put in your shipping address

because the United States Postal Service is going to deliver this nice willy

wonka package to your front door and you're going to get your Myga owner's

manual. I do encourage you to go to my site stantheannuitymancom to look

up current rates. And if one of those rates look appealing to you and you want

to lock that in. You let us know as well we'd be more than happy to take

care of you and have you as a client. With that, thanks for joining me and

we'll see you next time.