MYGA vs. Fixed Annuity - YouTube

Welcome back, I'm Stan the Annuity Man.

Today, we're going to talk about multi-year guarantee annuities versus fixed annuities.

So, MYGAs --multi year guarantee annuities versus fixed annuities.

So, what's you're really going to find out today is what is a multi year guarantee annuity

as opposed to just a fixed annuity or are they the same thing?

So, hang in there with me.

This is going to be interesting.

Boy, we have a lot to cover today on multi-year guarantee annuities and fixed annuities.

First of all, we're going to talk about is a multi-year guarantee annuity a fix annuity?

What is a multi-year guarantee annuity.

We're also going to talk about what multi-year guarantee annuities solve for and the other

types of what's called fixed annuities.

There's all kinds of fixed annuities.

So, when your people say, "I hate all annuities", it's like saying "I hate all restaurants"

Or "I hate all shoes".

It's crazy.

It's uninformed.

It's misleading.

So we're going to talk about all fixed annuities.

And then I'm going to go over the benefits and the limitations of fixed annuities, multi-year

annuities.

And at the very end, I'm going to tell you where it fits in your portfolio.

And then I have a surprise for you.

I've written a book on these topics.

Multi-year guarantee annuity.

And I'm going to tell you how to get it for free.

So, what is a multi-year guarantee annuity?

It is a fixed annuity.

It's a fixed rate annuity.

It's like a CD.

In fact, it's the industry.

The annuity industry version of a CD.

What is a CD?

You're probably familiar with that.

Give the bank or brokers some money.

And the guarantee an interest rate for specific period of time like a one-year CD or 3-year

CD.

Multi-year guarantee annuities, fixed rate annuities are the same thing.

Same principle.

You give the insurance company money and they guarantee specific interest rate for specific

period of time.

The difference primarily is with the CD and the non-IRA account, you have to pay taxes

on the interest every year.

With the interest on a multi-year guarantee annuity and a non-IRA account, it compounds

tax deferred.

So, multi-year guarantee annuities solve for principle protection.

It's your safe money.

It's CDs and money markets and triple A, triple A municipal bonds and treasuries.

And then you have the fixed rate annuities, multi-year guarantee annuities.

It's where you don't want to lose a penny.

It's where you don't want the markets to mask what your principle.

You want to protect that principal.

You want to get an interest rate and with multi-year guarantee annuities, most of them

allow you to peel off interest.

But some of them don't.

So, if you don't need the interest to come out, then you can choose one that has a really

high guarantee for that specific period of time or if you say, "Hey, I want the guarantee

but I also want to peel of that interest every month."

We can find those for you as well.

So, let's briefly talk about fixed annuities just as a category.

Because once again, if people say, "I hate all annuities."

Come on!

Just like saying, "I hate all restaurant."

You can't say that.

So, fixed annuities can mean multi-year guarantee annuities.

Other types, the primary types of fixed annuities would be fixed index annuities.

Would also be qualified longevity annuity contracts.

Deferred income annuities.

Single premium immediate annuities.

So, when you say fixed annuity, it's pretty broad topic.

Some solve for income, some solve for principal protection.

But what we're talking about primarily today is principal protection using fixed rate annuity

also called a multi-year guarantee annuity.

So, there all these different types of fixed annuities.

Go to my video on how to choose an annuity and find out the details on how you can figure

out which one is best for you.

Alright.

One of the benefits of multi-year guarantee annuities fixed rate annuities.

Principal protection, the market's not going to disrupt the principal.

You could peel off interest with some of them.

Some may can't.

Are they guarantee.

Inside of an IRA, it's guaranteed interest rate just like a CD would be outside of an

IRA.

The interest grows and compounds tax referred.

With CDs, you'd had to pay taxes on that annual interest.

But both are perfect products for principal protection.

But CDs and multi-year guarantee annuities are safe money products.

Both work in your portfolio.

One's not bad than the other.

It's just you shop all of them for the highest contractual guaranteed rate for this specific

term.

So, if you're saying, "I need a 3-year guarantee."

Shop both CDs and multi-year guarantee annuities and choose the one that fits best for your

situation and what account that you're using it in.

Typically, multi-year guarantee annuity rates are higher than certificate of deposit -CD

rates.

Kind of 3 years and out.

3 years in CDs are competitive and sometimes beat multi year guarantee annuities.

But 3 years and out multi-year guarantee annuities provide the highest contractual guarantee.

Doesn't mean you have to buy one.

But if you're looking for the highest contractual guarantee, those are kind of the parameters

that I look at.

Also remember, just like CDs, multi-year guarantee annuities have no annual fees.

And you can buy them an IRA or non-IRA accounts.

You could hold them in a ROTH account as well.

And finally, one of the benefits that I love with multi-year guarantee annuities.

And it also can be used with CDs--certificate of deposit.

It's what I called laddering.

So, in other words, if you had a set amount of money.

Let's just say that you had $120,000 and you said, "You know what, Stan?

I don't know where interest rates are going.

But I don't want to lock in too long over term.

And if they move, I want to have money come and due."

Here's the way to ladder that.

With the 120,000, instead of trying to be a genius and think you know where rates are

going because non of us know.

You take $40,000 and buy a 3-year MYGA, multi-year guarantee annuity.

$40,000 and buy 4-year multi-guarantee annuity.

And $40,000 and buy a 5-year.

What's happened there?

You've laddered the durations.

Meaning that you're going to have money coming dues starting in year 3 and hopefully, we

can transfer that multi-year guarantee annuity to a higher rate.

Now, also remember with multi-year guarantee annuities, you can transfer from one to the

other without creating any type of tax consequence as well.

So, talk a little bit more about laddering.

I had a gentleman called me the other day and he said, "You know what?

I want to do a ladder like one year all the way out to 7 years."

I said, "Fine.

That's perfect."

What we did is we shopped all rates on my sites, Stantheannuityman.com for MYGAs and

I told him to go to bankrate.com which has the best place to shop for CDs nationally.

So, what he ended up doing?

He ended up buying one-year CD, a 2-year CD and actually a 3-year CD.

And then he bought a 4, 5 and 7-year myga.

So he had laddered across the board.

Had money coming dues starting in year one.

He got the highest contractual guarantees with the product.

You know the CDs had some higher contractual guarantees at the low end of the duration.

And then the MYGAs had the high end of duration.

The multi-year annuities.

So, that's the way to ladder using CDs and multi-year guarantee annuities.

Pretty much the same product.

Let's talk about limitations on multi-year guarantee annuities.

First of all, not all carriers offer them.

Some do, some don't.

When you go to stantheannuityman.com and pull up that live myga feed that we have, you'll

see when you put in your state, the duration, you'll see what's approved in your state.

Also too.

The surrender charges are very high.

So let's say for example you bought a 5-year multi-year guarantee annuity and you want

it to cash it out year 3, it's going to be pretty high surrender charge to get out.

Now, understand if you hold that multi-year guarantee annuity to the term, to the end

of the term, there's no surrender charges.

But they have to charge those high surrender charges to lock in that guarantee to contractually

guarantee that amount of money.

Another limitation: Even though it's kind of a benefit.

The benefit is in a non-IRA account, multi-year guarantee annuity interest grows tax referred.

But the limitation coming back is...

You and I both know the IRS.

They're eventually going to tap on the shoulders and say, "Hey, need those taxes."

So when you take money out of the multi-year guarantee annuity, there are going to be tax.

Those gains are going to be tax first.

So, last and first out.

And that money taken out as tax at ordinary income levels.

"So, Stan the annuity man, where do I shop for these wonderful multi-year guarantee annuity

like you're talking about?"

Well, I tell you where go.

You go to stantheannuityman.com.

You don't have to sign up.

You just click a button under my beautiful picture and it will take you to a live multi-year

guarantee annuity fee which you're asked 2 questions.

What's your state you live in?

What's your state of residence and what duration do you want to see.

And then you can shop around until your heart is content.

And you can find the best contractual guarantees that multi-year guarantee annuities have to

offer for your state.

that's approved in your state.

Because remember, multi-year guarantee annuities and fixed rate annuities, all types are regulated

at state levels.

So all states are going to approve multi-year guarantee annuities that might not be approved

in other states.

So, it's important to go to my site and filter the state and the duration that you're interested

in.

So, where do mygas fit multi-year guarantee annuities?

I apologize for that.

That's kind of the industry speak.

MYGAs --multi-year guarantee annuity.

That's the acronym.

So, where does a multi-year guarantee annuity fit in your portfolio?

Safe money.

CDs, triple A, triple A munis.

Tresuries.

Places you don't want to lose a penny of your principal.

But you still want interest.

That's where multi-year guarantee annuities fit.

IRA, Non-IRA, roth IRA.

It's a place for you to protect the money.

You might want to call it trending water.

If you don't want to put money in the market, you're a little bit scared at the market but

you want to still protect your principal and make some interest?

Multi-year guarantee annuities.

And oh, by the way, remember at the first, I told you about the book I'm going to give

you?

Here it is.

Multi-Year Guarantee Annuities owner's manual.

I'm going to give it to you for free.

No obligation, nobody's going to call and show up at your door.

We're just going to send it to you and treat you like a professional.

And not only that.

It comes with in this really shiny gold package to make sure that you open and you know it's

coming from me.

So, get the book.