Z3Dreamer
Thinks s/he gets paid by the post
I looked at the various fixed income threads and didn't see anything on annuities. Forgive me, if I have sinned.
A Fido fixed income rep suggested that I look at Single Premium Deferred Annuities. I asked if he was talking about MYGA's. He doesn't use the term MYGA, but basically you pay some money and at the end of the term you get your principal plus a guarantied interest. You can choose term and other things. The rates are around 5% for 3 to 5 years. I have already purchased a big ol US agency bond so it isn't for me but I want to learn.
My question is: What is the appeal of a 5% annuity when you can get 6% or close to it from many other sources? The only thing I can think of is that you pay taxes on the annuity in the year it matures, whereas other investments are taxed each year. Any other reasons?
Please note that I am not looking for general annuity info as I have studied them for over 30 years.
PS Thank you for those who educated me on agency bonds as I purchased a big ol bond on Monday.
A Fido fixed income rep suggested that I look at Single Premium Deferred Annuities. I asked if he was talking about MYGA's. He doesn't use the term MYGA, but basically you pay some money and at the end of the term you get your principal plus a guarantied interest. You can choose term and other things. The rates are around 5% for 3 to 5 years. I have already purchased a big ol US agency bond so it isn't for me but I want to learn.
My question is: What is the appeal of a 5% annuity when you can get 6% or close to it from many other sources? The only thing I can think of is that you pay taxes on the annuity in the year it matures, whereas other investments are taxed each year. Any other reasons?
Please note that I am not looking for general annuity info as I have studied them for over 30 years.
PS Thank you for those who educated me on agency bonds as I purchased a big ol bond on Monday.