MYGA vs CD for Part of Fixed Income Allocation

[MercyMe]

I will soon have a jumbo CD mature and I have a couple more maturing later this year. I want to maintain my current asset allocation and so I could put the proceeds from the CD's into an intermediate bond fund. But it might be a better idea to put the funds from the CD's into several MYGA's (due to state insurance guaranty limits). I have a couple of MYGA's now and I'm comfortable with them. Today's rate for a 5-year MYGA from an A-rated insurer is about 4% and I suspect they will be even higher a few weeks from now when my CD matures.

I am interested in getting some thoughts from forum members on the idea of using MYGA's in place of an intermediate bond fund for part of my fixed income allocation.

 

[Koolau]

Since you have some already, I assume you are fully aware of the various withdrawal restrictions of MYGAs. Of course, CDs have restrictions as well. I have MYGAs and have found them useful in enhancing my interest over CDs. YMMV

 

[MercyMe]

Hey Koolau. Do you count MYGA's as part of your fixed income allocation or part of your cash allocation?

 

[jazz4cash]

I am very comfortable with MYGA products from insurers rated B or better. I generally categorize bonds, MYGA and CD investments based on remaining term. 2 years or less I consider cash for allocation purposes and over 2 year are lumped into a bond bucket. The only reasons I can think of for choosing a bond fund over a MYGA is to consolidate/simplify with a single company and ease re-allocation into stocks, etc. as opportunities arise.

 

[Dtail]

Hey Koolau. Do you count MYGA's as part of your fixed income allocation or part of your cash allocation?

I have MYGA's and brokered CD's and definitely count them as a bond substitute allocation.

 

[Koolau]

Hey Koolau. Do you count MYGA's as part of your fixed income allocation or part of your cash allocation?

If I think about it, I suppose it's really fixed income, but I think of it as cash. Hope that makes sense to you 'cause I'm not sure it does to me.

 

[MercyMe]

Haha! I get it.



Thanks to everyone.

 

[pletal]

I will soon have a jumbo CD mature and I have a couple more maturing later this year. I want to maintain my current asset allocation and so I could put the proceeds from the CD's into an intermediate bond fund. But it might be a better idea to put the funds from the CD's into several MYGA's (due to state insurance guaranty limits). I have a couple of MYGA's now and I'm comfortable with them. Today's rate for a 5-year MYGA from an A-rated insurer is about 4% and I suspect they will be even higher a few weeks from now when my CD matures.

I am interested in getting some thoughts from forum members on the idea of using MYGA's in place of an intermediate bond fund for part of my fixed income allocation.

I have many cd’s coming due in the next 12 months. Low seven figures, and I will be loading up on MYGA. Just keeping below the state covers limit. Going to ladder them just like CD’s. Probably go 5 to 10 years out. Good luck

 

[Koolau]

I have many cd’s coming due in the next 12 months. Low seven figures, and I will be loading up on MYGA. Just keeping below the state covers limit. Going to ladder them just like CD’s. Probably go 5 to 10 years out. Good luck

Are you willing to share the name of your favorite INS Co. you use for MYGAs? I'm thinking about more MYGAs myself - not to the extent you are planning perhaps. I've found the sweet spot for best rates is $100K. Thanks.

 

[Debinnov a]

Where do you get MYGAs? My Fidelity guy acted like he didn't know what they were.

 

[Sasquatch1]

Is the state guaranty portion per issuer?

 

[finnski1]

Where do you get MYGAs? My Fidelity guy acted like he didn't know what they were.

.
This is an excellent source of quotes and general info about MYGA's
read the questions etc. and the tutorial.

https://www.immediateannuities.com/deferred-annuities/