Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
MYGA Owners: What is the highest allocation you'd have?
Old 12-04-2022, 05:29 PM   #1
Recycles dryer sheets
MercyMe's Avatar
 
Join Date: May 2022
Posts: 163
MYGA Owners: What is the highest allocation you'd have?

I recently paid for an hour of chat with a CFP who among other things, suggested that I not allocate more than 10% of my investable assets into MYGA's. I already have two MYGA's (both paying about 3%) and was thinking about adding another one next month from a third insurer if rates stay where they are or go higher.

The next investment amount would be $200k and with this, it would bring me to about 10% of my assets in MYGA's. I wouldn't mind buying a fourth one though since I'm in a high tax bracket and am planning to retire in a year at age 53. The tax deferral is very appealing since I will likely be in a much lower bracket in retirement.

For those here that use MYGA's, at what percent of your assets would you limit this type of money.
MercyMe 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 12-04-2022, 08:59 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jan 2018
Location: Tampa
Posts: 10,100
I invest for my parents and their percentage is around 20%. It is diversified in years and issuers. I don't see issues with being over 10%.
__________________
TGIM
Dtail is online now   Reply With Quote
Old 12-04-2022, 09:23 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 7,254
Did the CFP say why you should limit MYGA exposure to 10%?
I see no reason to do so but I lump MYGA, CDs, and bonds into a fixed income ladder that is 30% of my portfolio. Bonds and CDs have pulled back a bit and now I think MYGAs will do the same. Blueprint Income just sent me a notice that an A rated provider will be lowering their 5yr from 5.6% on 12/7. Thatís a bit better than the bonds and CDs Iím looking at. Iím currently ~6% MYGA.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is online now   Reply With Quote
Old 12-05-2022, 09:04 AM   #4
Recycles dryer sheets
MercyMe's Avatar
 
Join Date: May 2022
Posts: 163
Quote:
Originally Posted by jazz4cash View Post
Did the CFP say why you should limit MYGA exposure to 10%?
I see no reason to do so but I lump MYGA, CDs, and bonds into a fixed income ladder that is 30% of my portfolio. Bonds and CDs have pulled back a bit and now I think MYGAs will do the same. Blueprint Income just sent me a notice that an A rated provider will be lowering their 5yr from 5.6% on 12/7. Thatís a bit better than the bonds and CDs Iím looking at. Iím currently ~6% MYGA.
Honestly, my thinking is that this CFP is just not that familiar with MYGA's.

I got that same message about the 5.6% MYGA dropping soon but I'm not buying until January. I already bought one in January of this year and would like to avoid having two come due in the same year.
MercyMe is offline   Reply With Quote
Old 12-05-2022, 03:48 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 12,237
Yeah, I would demand to know WHY 10%. My MYGA allocation happens to be about 10% but it just worked out that way. I had no specific limit in mind but YMMV.
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline   Reply With Quote
Old 12-05-2022, 03:57 PM   #6
Recycles dryer sheets
MercyMe's Avatar
 
Join Date: May 2022
Posts: 163
Well, he charges by the minute and this was probably the last time I'd use his service so its water under the bridge at this point.
MercyMe is offline   Reply With Quote
MYGA Owners: What is the highest allocation you'd have?
Old 12-05-2022, 08:18 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 7,254
MYGA Owners: What is the highest allocation you'd have?

Quote:
Originally Posted by MercyMe View Post
Honestly, my thinking is that this CFP is just not that familiar with MYGA's.

I got that same message about the 5.6% MYGA dropping soon but I'm not buying until January. I already bought one in January of this year and would like to avoid having two come due in the same year.


One of the great features about MYGAs is that you can apply today to lock in the rate but you may not need to fund the purchase for 30-45 days. Then you have some period of time to cancel (10 -30 days IIRC) if something better comes along. Iím not positive but I assume the maturity date is the date the purchase is funded.

Edit:
Just checked the 5.6% annuity from Guaranty that Blueprint Income is brokering. The rate is lower if you have<100k. The time to fund is 45 days for IRA accounts, 0 days for taxable. Somehow Iím guessing you could negotiate a few days grace period. Also, you could probably just leave the funds in the annuity for an extra month to avoid having to declare too much income in a single year. The MYGAs I own pay 1% apr after maturity.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is online now   Reply With Quote
Old 12-05-2022, 09:47 PM   #8
Recycles dryer sheets
pletal's Avatar
 
Join Date: May 2009
Location: Tampa
Posts: 173
Quote:
Originally Posted by MercyMe View Post
I recently paid for an hour of chat with a CFP who among other things, suggested that I not allocate more than 10% of my investable assets into MYGA's. I already have two MYGA's (both paying about 3%) and was thinking about adding another one next month from a third insurer if rates stay where they are or go higher.

The next investment amount would be $200k and with this, it would bring me to about 10% of my assets in MYGA's. I wouldn't mind buying a fourth one though since I'm in a high tax bracket and am planning to retire in a year at age 53. The tax deferral is very appealing since I will likely be in a much lower bracket in retirement.

For those here that use MYGA's, at what percent of your assets would you limit this type of money.
I have about 15% in MYGAís. I see no issue with them and for tax purposes you can pull a percent some years and renew them if you donít need the cash. Kept us in a lower tax bracket this yearÖhopefully
pletal is offline   Reply With Quote
Old 12-06-2022, 08:16 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 6,436
I think the Key to a MYGA in my case are 2 fold. We only have 6% in MYGAs.

1) Deferred income till withdrawal (or Annuitizing)
2) The Ability to withdraw 10% per year penalty free

Those are the 2 features I look for.
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
ShokWaveRider is online now   Reply With Quote
Old 12-06-2022, 08:35 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 7,254
I noticed that MYGA from Guaranty (5 yrs @ 5.6%) only allows 5% withdrawal starting in the 2nd year. My Americo MYGAs allow 10% even in the 1st year. I did choose to take the withdrawal to mitigate risk and take advantage of higher rates even though I am only at 6%. The contract I just purchased in April is eligible for the 10% free withdrawal but it is taking longer than expected to transfer IRA funds.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is online now   Reply With Quote
Old 12-06-2022, 12:20 PM   #11
Recycles dryer sheets
 
Join Date: Jul 2018
Posts: 253
MOST FA dont want you to buy MYGA since they dont count as AUM. MYGA dont put any money in their pockets!!
Bruno is offline   Reply With Quote
Old 12-06-2022, 01:03 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 9,062
Broad brush, MYGAs are essentially corporate bonds. Certainly you'd want to diversify across multiple issuers but after that I don't see that this particular class of asset should have its own limit.
__________________
Ignoramus et ignorabimus
OldShooter is offline   Reply With Quote
Old 12-06-2022, 03:49 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 7,254
Quote:
Originally Posted by OldShooter View Post
Broad brush, MYGAs are essentially corporate bonds. Certainly you'd want to diversify across multiple issuers but after that I don't see that this particular class of asset should have its own limit.


Very broad. MYGAs are regulated insurance products backed by State Guaranty Associations. Diversify according to SGA limits in your state. They canít be called AFAIK but I must confess I did not read every one of the sixty-some pages for the ones I bought.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is online now   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
MYGA Holders, which Annuity Broker did you use to buy it? ShokWaveRider FIRE and Money 82 08-11-2022 05:58 PM
MYGA vs CD for Part of Fixed Income Allocation MercyMe FIRE and Money 11 06-15-2022 06:42 AM
Does Anyone Here Have a MYGA, (Multi-Year Guaranteed Annuity )? ShokWaveRider FIRE and Money 0 07-31-2018 09:35 AM
What's the highest SWR you're comfortable with? Focus FIRE and Money 75 09-19-2010 07:43 PM
What's the highest amount you would self-insure for? figner FIRE and Money 29 05-10-2007 05:09 PM

» Quick Links

 
All times are GMT -6. The time now is 07:22 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2023, vBulletin Solutions, Inc.