Many people use a MYGA to earn a guaranteed rate of return without exposure to market risk. It provides predictable growth over a set period of time.

multi year guaranteed annuity (MYGA)

A MYGA, or Multi-Year Guaranteed Annuity, is a type of fixed annuity that offers a guaranteed interest rate for a set number of years. Your principal is protected, and your rate is locked in for the entire term. Earnings grow tax-deferred until you withdraw them. It’s often used as a stable, predictable alternative to CDs for retirement savings.

Common uses For Life Insurance

safe retirement growth

alternative to bank cd’s

A MYGA is often used as a higher-yield, tax-deferred alternative to traditional certificates of deposit. It offers similar stability with the potential for competitive fixed rates.

parking funds before retirement income

Some individuals use a MYGA to safely grow money for a few years before turning it into guaranteed income. It can serve as a bridge between accumulation and retirement payout planning.

when would a myga make sense

MYGA makes sense when you want guaranteed growth without market risk for a set period of time. It can be a strong fit if you have money you don’t need immediately and want to lock in a predictable interest rate. Many people use a MYGA when interest rates are attractive and they want stability over uncertainty. It’s also useful as a conservative portion of a retirement strategy or as an alternative to CDs. If your priority is safety and certainty rather than chasing higher returns, a MYGA may be a good option.

  • Yes, your principal is protected from market loss. A MYGA offers a guaranteed interest rate backed by the financial strength of the issuing insurance company.

  • At the end of the term, you typically have options: renew for another period, withdraw your funds, or move the money to another financial solution. Most contracts include a window of time to make that decision without penalties.

  • MYGAs usually have surrender charges if you withdraw more than the allowed free withdrawal amount during the guarantee period. However, many allow up to 10% per year to be withdrawn without penalty.

  • Both offer fixed rates and principal protection, but a MYGA grows tax-deferred until withdrawn. CDs are typically taxed annually on interest earned, even if you don’t take the money out.

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