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11-01-2020, 11:04 AM
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#161
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,337
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FWIW I was in a quarterly review meeting with one non-profit's FA on Tuesday and we were talking about trying these. FA said that in their checking/past week or so, the MYGA rates quoted for over $100K started to decline vs smaller amounts. (!) I have not checked this out personally but it probably says that careful reading is important. We/nonprofit may buy a couple at $100K and see how things go. The state insurance guarantee funds are a definite plus when looking at an unfamiliar asset. DW and I have some TIPS maturing in January and I think we are headed the MYGA route too, probably also $100K. We'll see.
__________________
Ignoramus et ignorabimus
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11-01-2020, 11:41 AM
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#162
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,309
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Yup, the MYGA products are also sometimes called CD-type annuities. I expect to be trying one of these products early next year. My comfort level is B rating or better for a fairly tiny allocation. The three sites I track are Blueprint Income, Stan The Annuity Man ( Annuity Steakhouse) and immediate annuities.com. Another direct distributor is Gainbridge which is a division of Guggenheim. After signing up with some sites, I get advance notice before rates decline sometimes. With regard to Old Shooter's comment, I seem to recall some products are only offered to individuals and not institutions. Blueprint Income is esp. informative. There are many options with minimums less than 29k.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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11-01-2020, 12:16 PM
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#163
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Recycles dryer sheets
Join Date: Oct 2017
Location: New York, NY
Posts: 179
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Quote:
Originally Posted by jazz4cash
That’s a reasonable assessment. It’s the same ballpark, but better seats. I’m simply repeating what I’ve read many times. Here’s an example excerpt albeit’s 6 yrs old.....
So how do MYGs and bank CDs stack up against each other? To start, let's acknowledge the conventional wisdom holding that MYGs are generally the better choice because they offer higher rates and certain tax advantages. But is that the final verdict?
The entire article which favors CDs due to simplicity of the product is below. It discusses the MYGA tax deferral which seems significant to me but I’m not sure I trust their analysis....
https://www.marketwatch.com/story/co...ers-2014-03-28
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The CD-type annuities are very simple, just the same as a CD. The only thing one has to worry about is the reliability of the insurance issuing it. I didn't have a chance yet to explore them at this time, but hopefully I will soon and if I'm lucky to find the right insurance I'll probably get one.
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11-01-2020, 12:20 PM
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#164
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Recycles dryer sheets
Join Date: Oct 2017
Location: New York, NY
Posts: 179
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Quote:
Originally Posted by jazz4cash
Yup, the MYGA products are also sometimes called CD-type annuities. I expect to be trying one of these products early next year. My comfort level is B rating or better for a fairly tiny allocation. The three sites I track are Blueprint Income, Stan The Annuity Man ( Annuity Steakhouse) and immediate annuities.com. Another direct distributor is Gainbridge which is a division of Guggenheim. After signing up with some sites, I get advance notice before rates decline sometimes. With regard to Old Shooter's comment, I seem to recall some products are only offered to individuals and not institutions. Blueprint Income is esp. informative. There are many options with minimums less than 29k.
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Thanks so much for your suggestions which I'll try soon.
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11-01-2020, 12:45 PM
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#165
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Recycles dryer sheets
Join Date: Oct 2017
Location: New York, NY
Posts: 179
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Quote:
Originally Posted by jazz4cash
Yes. Good points wrt lack of FDIC and being familiar with individual state guarantee association limits. I don’t worry much about limits or credit ratings since I just have fairly small sums at risk in this type of product. I will diversify, ladder, and stay short/intermediate to mitigate risk.
As far as verifying if a particular investment is part of a pool, I’d be surprised if one could get any benefit of protection from the state guaranty assoc without being in the pool. In that case the provider’s credit rating would be critical.
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Would you kindly explain to me what this "pool" is about? Though I used to have a few CD type annuities I never heard this word. Does it mean that some states may not cover some insurance companies in case of bankruptcy or something? Anticipating my thanks.
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11-01-2020, 01:02 PM
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#166
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Recycles dryer sheets
Join Date: Oct 2017
Location: New York, NY
Posts: 179
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Quote:
Originally Posted by John Galt III
I added $100K to my PenFed 5 year cd's in 2019, so I have 3.5 % until 2024. Woohoo !
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Hi, do you mean you are allowed to add money to a CD already in place? That's wonderful! What did you have to do in order to add the money? I'd love to do it with some CDs I have now.....
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11-01-2020, 05:13 PM
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#167
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
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Add-on CDs are pretty rare for obvious reasons... the only ones that I know of currently issued are the Navy Federal EasyStart CDs... you give up a little rate... currently 0.1%... compared to a non-add-on CD but to me the add-on feature is well worth it (I got in late so mine is only 1.35%).
A lot of us got in on some 5-year 3% GTE Financial CDs in 2019 but those are no longer offered.
__________________
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
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11-01-2020, 08:17 PM
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#168
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: Independence
Posts: 7,281
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Quote:
Originally Posted by pb4uski
Add-on CDs are pretty rare for obvious reasons... the only ones that I know of currently issued are the Navy Federal EasyStart CDs... you give up a little rate... currently 0.1%... compared to a non-add-on CD but to me the add-on feature is well worth it (I got in late so mine is only 1.35%).
A lot of us got in on some 5-year 3% GTE Financial CDs in 2019 but those are no longer offered.
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And thank you again for opening my eyes to the addon CDs at NFCU. Called GTE a while ago and they claim one can go past the 250k on that addon (assuming you have an account that you feel lucky on or have more than $250 in NFCU insurance because of titling).
__________________
"Be kind whenever possible. It is always possible." Dalai Lama
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11-02-2020, 11:23 AM
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#169
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Recycles dryer sheets
Join Date: Sep 2013
Posts: 106
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Quote:
Originally Posted by kjpliny
The system is broken and the Federal Reserve is the root cause.
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Bingo! We have a winner. The savers, especially the elderly, are being punished to prop up the "economy" corporations and stock market speculators. As well as the governments runaway borrowing at all levels.
Grandma used to get a nice little extra income from her CD's at the bank. Her savings were used to finance home building and businesses in the community. Now it's all turned on its head.
It's all going to come undone one day.
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11-02-2020, 12:18 PM
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#170
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,309
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Quote:
Originally Posted by Rosedala
Would you kindly explain to me what this "pool" is about? Though I used to have a few CD type annuities I never heard this word. Does it mean that some states may not cover some insurance companies in case of bankruptcy or something? Anticipating my thanks.
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Another poster used the term “pool” which I assumed to be a reference to the State Guaranty Association. This works as a substitute for FDIC coverage.
From Investopedia.....
A state guaranty fund is administered by a U.S. state to protect policyholders in the event that an insurance company defaults on benefit payments or becomes insolvent. The fund only protects beneficiaries of insurance companies that are licensed to sell insurance products in that state.Jan 13, 2020
www.investopedia.com › terms › sta...
State Guaranty Fund Definition - Investopedia
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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11-02-2020, 12:25 PM
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#171
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,309
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Quote:
Originally Posted by pb4uski
Add-on CDs are pretty rare for obvious reasons... the only ones that I know of currently issued are the Navy Federal EasyStart CDs... you give up a little rate... currently 0.1%... compared to a non-add-on CD but to me the add-on feature is well worth it (I got in late so mine is only 1.35%).
A lot of us got in on some 5-year 3% GTE Financial CDs in 2019 but those are no longer offered.
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Yeah Add-on feature is sweet and way under appreciated. FWIW Navy Federal used to open up many of their CDs for add-on around the first quarter of the year. It was generally not advertised. Sometimes an add-on option will appear on their website on the CD Summary list but other times I just call and ask.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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11-02-2020, 12:49 PM
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#172
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,864
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I've given up on CD's... My local bank had some of the best rates I could find anywhere until the last year or so... Now their 48 mo CD's are down to 1.05%.... Not enough to bother with so I moved it all to my brokerage accounts... When it's not invested in "something" I sweep it into short term (overnight) bond funds which is better than nothing (but not by much)
Still getting 3.25% on fixed income investments from my 401k money with my old employer...... Not bad, IMO, for today's markets. Make enough on that to pay most of my living expenses year to year.
__________________
20's "something" mind, trapped in a 70's "something" body
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11-02-2020, 02:38 PM
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#173
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
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Quote:
Originally Posted by jazz4cash
Yeah Add-on feature is sweet and way under appreciated. FWIW Navy Federal used to open up many of their CDs for add-on around the first quarter of the year. It was generally not advertised. Sometimes an add-on option will appear on their website on the CD Summary list but other times I just call and ask.
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Good point... I took advantage of that once... I just happened to call and ask if my CD was an add on and while it was not, there was a short window where they were allowing add ons. Ca-ching!
__________________
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
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12-14-2020, 06:10 AM
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#174
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Recycles dryer sheets
Join Date: Apr 2004
Posts: 137
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bonds
How safe are short and intermediate bonds, when it looks like the interest rates may go up, sell them ?
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12-14-2020, 06:56 AM
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#175
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
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Quote:
Originally Posted by bobbee25
How safe are short and intermediate bonds, when it looks like the interest rates may go up, sell them ?
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If you plan to hold them to maturity, then no worries.
__________________
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
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12-14-2020, 07:02 AM
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#176
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Recycles dryer sheets
Join Date: Apr 2004
Posts: 137
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I was thinking of bond funds
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12-14-2020, 07:09 AM
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#177
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,309
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If interest rates go up the value of bonds and bond funds will go down. I don’t think you’d want to sell after rates rise. A fund might mitigate the effect of rising rates.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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12-14-2020, 07:10 AM
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#178
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,011
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Bond funds are not a substitute for CDs. Don’t take on more risk to chase yield.
And it’s almost impossible to anticipate interest rate changes. Nobody knows.
__________________
Retired since summer 1999.
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12-14-2020, 07:52 AM
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#179
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Full time employment: Posting here.
Join Date: Aug 2015
Posts: 550
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Quote:
Originally Posted by audreyh1
Bond funds are not a substitute for CDs. Don’t take on more risk to chase yield.
And it’s almost impossible to anticipate interest rate changes. Nobody knows.
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+1
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12-14-2020, 08:26 AM
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#180
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,202
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Quote:
Originally Posted by bobbee25
How safe are short and intermediate bonds, when it looks like the interest rates may go up, sell them ?
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Define safe. Bonds have a risk of default. It's usually very low, but if things go really really bad, it may not be so low. All other investments will probably get whacked too. In normal times, a bond fund will give you the protection of numbers to minimize the effect of a few defaults. Investing in individual bonds, you need to do a little research and try to diversify as best you can. I'd bet most of the individual bond investors here have never had one of their bonds default.
If you're just talking about losing money, yeah, bond funds will lose money as rates rise, but the yield will go up as well. You can avoid loss on individual bonds by holding to maturity, but that locks you into that low rate.
You talk about selling if interest rates "may go up". Not so easy to predict, and what are you going to invest in when you do sell? And when do you know that they have stopped going up to get back in?
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