Fixed Annuity Rates
(MYGA) vs Bank Rates
Some simple fixed rate annuities are wrongfully referred to as CD annuities. However, they do share a few similar characteristics such as a multi-year interest **guarantee, a high degree of safety and early withdrawal fees. So, here’s the bank rates vs annuity rates difference: (continued below video)
**Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. During this segment, Dick and Eric are referring to Fixed Annuities unless otherwise specified.
Multi-Year **Guaranteed Annuity Rates
- Safety: Backed by A-rated or better state-regulated insurers;
- Tax Deferral: Tax-deferred growth;
- Higher Return: Fixed annuity rates are typically better interest rates than Banks;
- Life Insurance: Death payout **guarantee options;
- Partial Liquidity: Flexible withdrawal privileges;
- Unlimited Contributions: For tax deferral unlike IRAs and 401(k)s;
- Inheritance: Pass money directly to heirs bypassing probate;
- Creditor Protection in Most States;
- Lifetime Income Option: Income you can’t outlive (Annuitization or a Living Benefit Rider.)
Bank Rates: Comparison
- Safety: Backed by FDIC insurance;
- No Tax Deferral;
- Typically lower interest than annuities;
- No Death Benefit other than account value;
- No partial Liquidity or Flexible withdrawal privileges;
- Inheritance: More likely to go through probate;
- Subject to creditors;
- No Lifetime Income Option.
Today's Top Ten Fixed Annuity Rates (MYGA)
Annuity Rates or Bank Rates: Which is Better for You?
As suggested by the name, Multi-Year **Guarantee annuities have some characteristics of traditional Certificates of Deposit and fixed annuities. However, there are distinct and substantial differences that one needs to be aware of.
The contrasts between Multi-Year **Guaranteed annuities and traditional bank instruments can make a significant difference in how a portfolio works for future income. This being said, take a moment to note the distinctions before determining the appropriate choice for your particular situation.
Multi-year-guarantee-annuities**, (MYGA) share several attractive characteristics with other fixed annuities. For starters, both options **guarantee the consumer a fixed rate of interest. Some fixed annuities will only give this interest rate for a portion of the term, whereas MYGA annuities give this rate for the entire period.
For instance, you may obtain an eight-year fixed annuity at 3.5 percent interest (annuity rates 2018), but this rate may only be **guaranteed for the first five years. The MYGA fixed annuity, however, will continue earning 3.5 percent for the full eight-year period.
Another added feature is that Multi-Year **Guaranteed fixed annuities can be rolled over into other annuities without the transfer amount being taxed as reportable income. Traditional banking instruments may not be transferred between accounts to avoid taxation and are not tax-deferred; they incur taxation annually.
Many multi-year-guarantee-annuities**, typically allow up to 10 percent of the account value including interest to be liquidated annually without penalty; this is helpful for planned withdrawals or in case of unforeseen circumstances. With traditional banking instruments, typically the entire account must be liquidated in order to remove amounts of any size. IRS imposed 10 percent early withdrawal tax penalties on earnings are applied to annuities for those under fifty-nine and one half years old.
Multi-Year **guaranteed fixed annuities can provide the same income-for-life annuitization option that standard fixed annuities offer. Banking instruments, however, cannot provide this benefit because any stream of income ends once bank account values are depleted.
Unlike multi-year-guarantee-annuities** issued by insurance companies, traditional banks and are insured by the FDIC for up to $250,000 per account. On the other hand, multi-year-guarantee-annuities** are covered by the claims paying ability of the issuing insurance company and their State Insurance Guarantee Association (SIGA) with coverage varying by state–SIGA should not be compared to FDIC which has the full backing of the U.S. government. The amount of SIGA coverage limits on annuities is dependent upon the state in which the annuity is issued, typically ranging between $100,000 and $500,000.
Question: Why do banks advertise FDIC insurance and insurance institutions do not advertise SIGA (State Insurance Guarantee Association)?
Answer: Government regulations allow banks to promote the FDIC and prohibit insurance institutions from including the SIGA in any marketing or informational materials until AFTER funds are placed into annuities or life insurance. Then SIGA is openly disclosed. Always consider the strength of the insurer first and the SIGA as an additional **guarantee.
Using OutCome Based Planning™ for Your Retirement
We practice and recommend a "Holistic - OutCome Based Planning™ process when considering annuities." This approach has the effect of balancing your overall portfolio so you can meet your retirement objectives by "first identifying the least amount of your investments or savings (if any) that should be considered for annuities." OutCome Based Planning™ analyzes and models multiple outcomes so you can clearly identify your best income and growth opportunities.
"The Annuity Guys will only call if you request help". Hence, when you are ready for specialized help we will be available."Working with an Experienced Fiduciary Financial Planner can help you Avoid a Trial & Error or Risk Based Retirement"
This type of approach does take considerably more time, effort and analysis which will show you mathematically the successful possibilities by comparing various outcomes rather than trying to sell or convince you of that "so-called one best solution." Clients frequently tell us that this process removes some of the confusion and emotion to help them objectively identify a better retirement plan; rather than just ending up with the most convincing salesperson or advisor.
When requesting help you can be assured of working with an experienced Annuity Guys' Retirement Planner who is independently insurance licensed and securities licensed as a fiduciary financial planner having access to the vast majority of annuity companies in helping you choose the best annuities using a holistic-outcome based planning approach. We consider the high quality advisor recommendations we make to our website visitors as a direct reflection back on our commitment to serve all client's with a high standard of excellence in financial planning for retirement.
Based on survey feedback on advisors from our website visitors, we eliminated about two-hundred local advisors and now only recommend a few that we consider experienced vetted Annuity Guys' Fiduciary Advisors. Many local advisors continue requesting us to recommend them as a vetted advisor. However, our reputation and future business is driven only by satisfied website visitors. So, unfortunately we've had to tell the vast majority of local advisors no, since we changed our business model four years ago. At that time we stopped trying to satisfy everyone with local advisors, we now primarily work with individuals who are comfortable using today's internet technology to their fullest advantage by working with a select group of vetted, experienced and knowledgeable Annuity Guys' Fiduciary Planners.
Selecting the Best Annuity & Retirement Income Advisor
Are you willing to work with one of our retirement and annuity advisors based on their experience and expertise as a first priority rather than being limited by a local or regional area? The good news is that technology has forever eliminated our geographical limitations and leveled the playing field for everyone! As a result of today's technological advances, all of us can now work confidently with experts in any field including personal finance. We are no longer confined by regional or local boundaries limiting our choices and ultimate success. A high quality advisor is now as close as a click or phone call away.
"There is no room for trial and error when it comes to choosing MarketFree® Annuities or a Successful Retirement Planner."
"There are no undo buttons in retirement so it is vitally important that you do it right the first time!"
We are fortunate to have a select few who we believe are truly the highest qualified advisors out of about two hundred licensed insurance agents that we eliminated. Your survey feedback is what helps us make these tough decisions. Our advisors have an independent financial practice, specializing in annuities and retirement planning, which helps ensure that you are given the best options available for your retirement planning.
"It takes an experienced expert to know how to structure annuities for income, inflation, growth, return of principal, and tax advantage."
"Anyone can sell you an annuity; however, it takes a truly qualified and experienced advisor to know how to structure them for income, inflation, growth, return of principal, and tax advantage. Typically, there is not just one that can accomplish all of these objectives. It is how an advisor structures multiple annuities in balancing your total portfolio that makes it possible to achieve your most important retirement objectives."
Why Searching for the Best Annuities on Your Own Can be so Frustrating...Almost everyone nowadays turns to the internet for answers on everything - from buying new widgets to researching just about everything under the sun; and finding the best annuity is no exception!At first, it may seem that researching will be straightforward but the more time you spend researching them, the more frustrating it can be. Why is this? First of all, it does not take long to realize that gimmicks abound - such as warnings and alerts from salesmen who just want your attention so they can sell you one or the "too good to be true" claims of 8% to 14% **guaranteed interest and of course the claim that you can get the full market upside with no downside risk! If you have done any research you have heard all of these claims in advertising which are mostly half truths and not fully explained.So how can you find the best annuities on the internet? The truth is... you can't! And what is even more frustrating is all the conflicting points of view from so called experts. There are well over 6,000 different annuities - all designed for different reasons, so is it any wonder that the deck is stacked against the average researcher or do-it-yourselfer. Add to that the fact that they pay high enough commissions to attract a plethora of both good and bad agents. This does not make annuities good or bad; they are simply a financial tool that truly benefit those who use them correctly.How can you find the best annuities for your unique situation?
- Use the internet cautiously;
- Work with a vetted and experienced specialist;
- Do not settle for that one dubious best plan. Compare multiple Outcome Based Plans to decide on the one that is truly best for you;
- Be keenly aware of scare tactics and hyperbole - avoid those advisors and websites;
- Avoid websites that are focused on rushing free reports, rates and quotes to get your contact information they are rushing you to speak with them, instead, take your time and choose someone you are more comfortable with that works on your time-table;
- Know the Five Vital Factors (listed above) that an experienced specialist must answer before helping you select the best options for your situation;
- Watch this telling video "Avoid Annuity Gimmicks, Amateurs and Charlatans"...
** Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Annuities are not FDIC insured and it is possible to lose money.
They are insurance products that require a premium to be paid for purchase.
Annuities do not accept or receive deposits and are not to be confused with bank issued financial instruments.
During all video segments, Dick and Eric are referring to Fixed Annuities unless otherwise specified.
*Retirement Planning and annuity purchase assistance may be provided by Eric Judy or by referral to a recommended, experienced, Fiduciary Investment Advisor in helping our website visitors. Dick Van Dyke semi-retired from his Investment Advisory Practice in 2012 and now focuses on this website. He still maintains his insurance license in good standing and assists his current clients.
Our vetted and recommended Fiduciary Financial Planners are required to be properly licensed in assisting clients with their annuity and retirement planning needs. (Due diligence as a client is still always necessary when working with any advisor to check their current standing.)
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- MarketFree™ Annuity Definition: Any fixed annuity or portfolio of fixed annuities that protects principal / premium and growth by remaining market risk free.
- Market Free™ (annuities, retirements and portfolios) refer to the use of fixed insurance products with minimum guarantees that have no market risk to principal and are not investments in securities.
- Market Gains are a calculation used to determine interest earned as a result of an increasing market related index limited by various factors in the contract. These can vary with each annuity and issuing insurance company.
- Premium is the correct term for money placed into annuities principal is used as a universal term that describes the cash value of any asset.
- Interest Earned is the correct term to describe Market Free™ Annuity Growth; Market Gains, Returns, Growth and other generally used terms only refer to actual Interest Earned
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