Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
3 year term Fixed Guaranteed Growth Annuity
Old 04-08-2021, 08:01 AM   #1
Dryer sheet aficionado
 
Join Date: Jan 2018
Location: Sandy Springs
Posts: 31
3 year term Fixed Guaranteed Growth Annuity

Given the current low CD rate environment, my financial rep suggested I consider a 3 year term Fixed Guaranteed Growth Annuity with a return as high as 1.7%. The 6 firms recommended have S&P ratings of of AA+, AA- or A+.

Has anyone utilized this type of investment option? It's my understanding the funds are not insured so evaluating the counterparty risk is critical. I generally avoid annuities but this has my interest. What are the pros and cons?
FIREHAPPY is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-08-2021, 08:27 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
MRG's Avatar
 
Join Date: Apr 2013
Posts: 9,755
MYGA? or other names. There's been a few threads on these. You know what you think you know, It's about the insurance company's risk of default. I bought one of these last year.

Make sure you understand the withdrawal aspect. You don't want to need early withdrawal outside the yearly window.
MRG is online now   Reply With Quote
Old 04-08-2021, 08:31 AM   #3
Recycles dryer sheets
 
Join Date: Feb 2021
Location: Puget Sound
Posts: 280
We are likely doing this in August when the current MYGA matures. 3 years will get us to DW's 60th, and it is in her name. Thanks for posting up the rate you were quoted, do you mind sharing the companies?
skyking1 is offline   Reply With Quote
Old 04-08-2021, 08:33 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
MRG's Avatar
 
Join Date: Apr 2013
Posts: 9,755
https://www.early-retirement.org/for...d.php?t=107187

Check this one out.
MRG is online now   Reply With Quote
Old 04-08-2021, 08:55 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 28,931
Quote:
Originally Posted by FIREHAPPY View Post
Given the current low CD rate environment, my financial rep suggested I consider a 3 year term Fixed Guaranteed Growth Annuity with a return as high as 1.7%. The 6 firms recommended have S&P ratings of of AA+, AA- or A+.

Has anyone utilized this type of investment option? It's my understanding the funds are not insured so evaluating the counterparty risk is critical. I generally avoid annuities but this has my interest. What are the pros and cons?
What he is probably steering you to is also know as Multi-Year Guaranteed Annuities or Single Premium Deferred Annuity... the insurer answer to bank CDs.

Rates are better than CDs right now anyway, there is some credit risk but for the highly rated insurers that you are looking at and the short time horizon the credit risk is negligible and they are typically subject to state guaranty funds (similar to FDIC insurance but not as robust).

The real problem with these is that early withdrawal penalties are severe if you need a lot of your money back... much higher than bank CDs... however, most products allow up to 10% withdrawals with no withdrawal fees around each policy anniversary.

So pro is a higher rate than CDs and cons are much higher early withdrawal penalties and negligible credit risk. If you're sure you won't need the money they are not a bad idea.

What are the companies that he recommended?
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA TBD
pb4uski is offline   Reply With Quote
Old 04-08-2021, 08:59 AM   #6
Dryer sheet aficionado
 
Join Date: Jan 2018
Location: Sandy Springs
Posts: 31
Insurance companies quoted are: USAA; Guardian; MassMutual; New York Life; Principal; Western and Southern
FIREHAPPY is offline   Reply With Quote
Old 04-08-2021, 09:05 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 28,931
All very good companies, especially NYL, Guardian and MassMu.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA TBD
pb4uski is offline   Reply With Quote
Old 04-08-2021, 09:09 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
MRG's Avatar
 
Join Date: Apr 2013
Posts: 9,755
I used Mass Mutual. Good company. 2.1% last year for a three year contract.
MRG is online now   Reply With Quote
Old 04-08-2021, 09:22 AM   #9
Moderator
Jerry1's Avatar
 
Join Date: Nov 2014
Posts: 5,046
About 6 months ago, I got a 7 year MYGA at 3.5%. As pb4uski points out, the early withdrawal penalty is severe so make sure you understand that. With mine, I can withdrawal the earned income annually without penalty. Though, I wouldn't have put the money there if I intended to use it so I'll just let it compound. Basically, it's a replacement for bonds or cash - part of my fixed allocation.
__________________
Every day when I open my eyes now it feels like a Saturday - David Gray
Jerry1 is offline   Reply With Quote
Old 04-08-2021, 12:15 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 5,764
There are 3 websites that have easy quotes for similar products including insurer rating, surrender fees and withdrawal features. I like Blueprint Income the best. The others are immediate annuities.com and StanTheAnnuityMan. Take a look there but the rates you were quoted for ultra highly rated insurers is probably competitive. These are not the annuity products that people say “stay away” from.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline   Reply With Quote
Old 04-08-2021, 03:49 PM   #11
Full time employment: Posting here.
 
Join Date: Jan 2008
Location: Flyover America
Posts: 657
I have 3 MYGAs (Deferred Fixed Annuity) purchased in last 6 months from Stan the Annuity Man.

5 year from Mut. of Omaha 2.65%
5 Year from Americo 3.05%
7 Year from Midland Life 3.5%

2 have 10% free withdrawals annually the other is interest only.

I have no intention of withdrawal of any of them.
capjak is offline   Reply With Quote
Old 04-08-2021, 05:07 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 8,726
Just bought one yesterday. My 4th one within the last year. I'm keeping them in the 3 year maturity range and all A+ rated. The higher rating hurts the return but I'm fine with that.
__________________
Retired 3/31/2007@52
Investing style: Full time wuss.
Dawg52 is offline   Reply With Quote
Old 04-08-2021, 05:35 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jan 2018
Location: Tampa
Posts: 7,858
Quote:
Originally Posted by pb4uski View Post
All very good companies, especially NYL, Guardian and MassMu.
I have used MassMutual and New York life for my parents.
__________________
TGIM
Dtail is offline   Reply With Quote
Old 04-11-2021, 05:48 PM   #14
Recycles dryer sheets
 
Join Date: Nov 2015
Posts: 98
Quote:
Originally Posted by FIREHAPPY View Post
Insurance companies quoted are: USAA; Guardian; MassMutual; New York Life; Principal; Western and Southern

I wasn't aware that USAA had MYGA's.

Edit: Looks like they have 3 year, 5 year and 10 year policies now. I don't believe they offered these in the past. There are better rates to be had elsewhere.
teej1985 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
VG Dividend Growth vs. VG Russell 1000 Growth ETF Looking4Ward FIRE and Money 6 01-31-2021 01:23 PM
Does Anyone Here Have a MYGA, (Multi-Year Guaranteed Annuity )? ShokWaveRider FIRE and Money 0 07-31-2018 09:35 AM
Suggested growth rate for portfolio growth estimates? doneat54 FIRE and Money 35 10-01-2013 11:03 PM
Emerging and Developing GDP Growth exceeds GDP Growth in Advanced Economies bUU Other topics 3 06-28-2013 11:42 AM

» Quick Links

 
All times are GMT -6. The time now is 02:16 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.