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Old 05-07-2020, 07:48 AM   #21
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Brewer, is this high quality corporate paper? munis? I get the term is short, but not sure where you are fishing.
Munis seem to have the most attractive opportunities lately. I would guess that I am feeding off retail holders who want to sell small lots to raise cash near maturity.
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Old 05-07-2020, 09:24 AM   #22
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Has anyone looked into multi-year guaranteed annuities? Looks like you can get a Mass Mutual 3 yr for around 2.1% - which is quite a bit better than CD's. Obviously, since they have surrender charges you don't want to use money you'll need. Any concerns?
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Old 05-07-2020, 10:25 AM   #23
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Has anyone looked into multi-year guaranteed annuities? Looks like you can get a Mass Mutual 3 yr for around 2.1% - which is quite a bit better than CD's. Obviously, since they have surrender charges you don't want to use money you'll need. Any concerns?


Yes, I am looking them. At the risk of getting pummeled for even bringing it up, I do have an eye towards MYGA products as CD rates continue to decline. Iím still getting >3% on 2 yr add on CDs but I might need an alternative investment at some point.
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Old 05-07-2020, 11:17 AM   #24
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Really the only difference I can see between a MYGA and a CD is instead of early withdrawal penalties you pay surrender charges. Also, they are issued by insurance companies instead of banks, so no FDIC insurance. Mass Mutual has a jumbo ($100,000) paying 2.1% What's the downside?
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Old 05-07-2020, 10:55 PM   #25
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The surrender charge is more severe if there is any chance youíll need the funds, but usually you can withdraw some annually with no penalty. I think some also use MVA to ding you if you exceed the free withdrawal.
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Old 05-07-2020, 11:18 PM   #26
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Another option for me would be an intermediate muni fund with taxable equivalent yield ~2.6% but taking the dividends monthly. This fund burned me when I reinvested the divvies.
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Old 05-08-2020, 01:34 AM   #27
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Has anyone looked into multi-year guaranteed annuities? Looks like you can get a Mass Mutual 3 yr for around 2.1% - which is quite a bit better than CD's. Obviously, since they have surrender charges you don't want to use money you'll need. Any concerns?
Annuities of any sort other than SPIAs should be reviewed by wiser individuals than the buyers.

I’ve dealt w/MMutual in the last 5 yrs and was disappointed and reassured by the engagement to never consider their services after wrapping up another’s fleecing after their death and mass mutuals history of their in force illustrations outcome.
It’s seems like a conflict of interest cutting short benchmarked market returns for insurance contracts till absolutely necessary.
Good luck &Best wishes.......
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Old 05-08-2020, 06:27 AM   #28
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Really the only difference I can see between a MYGA and a CD is instead of early withdrawal penalties you pay surrender charges. Also, they are issued by insurance companies instead of banks, so no FDIC insurance. Mass Mutual has a jumbo ($100,000) paying 2.1% What's the downside?
I think you got it. The penalties for early withdrawal are typically more onerous for a MYGA than for a CD. IMO, if you chose a well rated carrier then the credit risks are negligible, especially considering guaranty fund coverage.
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Old 05-08-2020, 07:55 AM   #29
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Annuities of any sort other than SPIAs should be reviewed by wiser individuals than the buyers.

Iíve dealt w/MMutual in the last 5 yrs and was disappointed and reassured by the engagement to never consider their services after wrapping up anotherís fleecing after their death and mass mutuals history of their in force illustrations outcome.
Itís seems like a conflict of interest cutting short benchmarked market returns for insurance contracts till absolutely necessary.
Good luck &Best wishes.......
Do you have any specific concerns / objections to MYGA's?
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Old 05-08-2020, 07:59 AM   #30
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I think you got it. The penalties for early withdrawal are typically more onerous for a MYGA than for a CD. IMO, if you chose a well rated carrier then the credit risks are negligible, especially considering guaranty fund coverage.
+1 I'm trying to figure out how to make more than the Fidelity MM (FZDXX) that is currently down to .4%. All of the brokered CD's are less than 1%. I'm wanting to keep my retirement funds at Fidelity. I've already moved my taxable funds to Ally.

I can get a 3yr MYGA from Mass Mutual or New York Life (both A++) for 2.1%. You can withdraw 10% per year penalty free and they have provisions for death, nursing home and hospitalization.

The other option would be buying some kind of short(er) term bond fund that yields over 2%. I would be willing to maybe take on a little interest rate risk, but not much. I'm just not finding much in the way of Fidelity bond funds that meet the criteria. I could always pony-up the $75 and buy a VG fund at Fidelity, if they are better.
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Old 05-08-2020, 09:58 AM   #31
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Yeah, I have money at both VG and Fido, and the Fido cash-like options are so consistently mediocre in the times that I have looked at them that I don't even bother looking at them anymore.
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Old 05-08-2020, 10:16 AM   #32
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Amex is still paying 1.5% for their money market account versus Fidelity's treasury fund which is now paying .01%. I moved a lot of cash out of Fidelity to Amex, Capital One, and two other MM savings accounts. They are limited to $500K FDIC coverage (joint accounts). My allocations is now 42% Cash and 58% corporate bonds. Right now all quality corporate bonds are overpriced whether they are high yield or investment grade. I'll wait for the next sell-off to buy more. Bond ratings mean absolutely nothing right now. The rating agencies are far lagging like they were in 2007/2008 Many investment grade bonds are headed for default and conversely many high yield bonds are trading like investment grade. The bond market is sorting our who survives and who files for bankruptcy. Many companies have issued more debt recently just to survive. I would avoid those companies as their business fundamentals probably won't improve and all they are doing is prolonging the inevitable.
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Old 05-08-2020, 10:30 AM   #33
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Marcus just sent an interest drop from 1.5% to 1.3%. They do still offer a no-penalty 7 month CD for 1.55%.
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Old 05-08-2020, 10:32 AM   #34
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Amex is still paying 1.5% for their money market account versus Fidelity's treasury fund which is now paying .01%. I moved a lot of cash out of Fidelity to Amex, Capital One, and two other MM savings accounts. They are limited to $500K FDIC coverage (joint accounts). My allocations is now 42% Cash and 58% corporate bonds. Right now all quality corporate bonds are overpriced whether they are high yield or investment grade. I'll wait for the next sell-off to buy more. Bond ratings mean absolutely nothing right now. The rating agencies are far lagging like they were in 2007/2008 Many investment grade bonds are headed for default and conversely many high yield bonds are trading like investment grade. The bond market is sorting our who survives and who files for bankruptcy. Many companies have issued more debt recently just to survive. I would avoid those companies as their business fundamentals probably won't improve and all they are doing is prolonging the inevitable.
You'll be waiting awhile... the Fed is buying corp bonds
https://fortune.com/2020/04/09/fed-b...e-coronavirus/
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Old 05-08-2020, 11:07 AM   #35
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True, but the Fed propping up the corporate bond market isn't going to do much to improve the various issuers ability to pay.... it is just delaying the inevitable.
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Old 05-08-2020, 11:32 AM   #36
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Really the only difference I can see between a MYGA and a CD is instead of early withdrawal penalties you pay surrender charges. Also, they are issued by insurance companies instead of banks, so no FDIC insurance. Mass Mutual has a jumbo ($100,000) paying 2.1% What's the downside?
I am being stalked by an outfit called Gainbridge offing a MYGA product. They are affiliated with Guggenheim which has a B+ rating, I think. Their offer is 2.75 for 3 yrs with 10k minimum. I think they allow 10% "free" withdrawal per year.

Does anyone know what happens if you skizp the "free" withdrawal (i.e. do you get to take more the 10% the following year)?

How much protection does your state guaranty fund provide?
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Old 05-08-2020, 11:33 AM   #37
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True, but the Fed propping up the corporate bond market isn't going to do much to improve the various issuers ability to pay.... it is just delaying the inevitable.
Agreed... but it hides the bond dropping in price because of declining ability to pay/reduces the yields on higher risk issues.
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Old 05-12-2020, 09:19 PM   #38
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I play the bonus game but it takes some work with opening accounts and moving money which it seems you find troublesome but Cap One is offering as follows:

Earn a $450 bonus when you deposit $50,000 or more, or $150 when you deposit $20,000–$49,999.99, of new money by May 31, 2020.

You need to keep it in for 90 days but it works out to nearly 4% apy. I probably collected 2 grand in bonuses in the last 12 months significantly pumping up my safe cash returns.
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Old 05-13-2020, 05:57 AM   #39
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I play the bonus game but it takes some work with opening accounts and moving money which it seems you find troublesome but Cap One is offering as follows:

Earn a $450 bonus when you deposit $50,000 or more, or $150 when you deposit $20,000Ė$49,999.99, of new money by May 31, 2020.

You need to keep it in for 90 days but it works out to nearly 4% apy. I probably collected 2 grand in bonuses in the last 12 months significantly pumping up my safe cash returns.
I rarely play the bonus game, but I opened a Cap One savings account yesterday, although for a slightly different/better deal: $100 per $10K deposited and kept in the account for 90 days.

https://www.capitalone.com/score500/
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Old 05-13-2020, 06:41 AM   #40
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I am being stalked by an outfit called Gainbridge offing a MYGA product. They are affiliated with Guggenheim which has a B+ rating, I think. Their offer is 2.75 for 3 yrs with 10k minimum. I think they allow 10% "free" withdrawal per year.

Does anyone know what happens if you skizp the "free" withdrawal (i.e. do you get to take more the 10% the following year)?

How much protection does your state guaranty fund provide?
For me I would want A rated or higher by AMBEST or Comdex around 80 or more. In regards to 10% free it depends on the insurance company but the ones I have seen do not allow 20% the next year if you skip 1 year. Also allow interest only withdrawal.
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