MYG = Multi-year guaranteed fixed annuity. This is like a EE bond or a Zero-coupon bond where you put in a certain dollar amount and after a fixed number of years you get a higher dollar amount at a specified rate of interest.
Never purchase a fixed annuity with only a one-year guaranteed interest rate. In an annuity, this multi-year guarantee is better than a zero-coupon bond (Zero-Coupon bonds should only be bought in a retirement account since interest is not paid out until the term is over but you must pay tax as you go).
The MYG fixed income annuity interest is deferred, too, and when purchased with after-tax money outside of a retirement account you get the tax deferral, in part, and pay tax on only a portion of your monthly payment (based on the exclusion ratio).
Remember, though, that you tie up your money for the period stated (usually 5 or 10 years).
Also remember, that with fixed income annuities the fees are never stated but all that matters is the interest rate and the guarantee period to you. If you like the interest rate and it is better than CD's and savings accounts and money market funds then it should be considered as an alternative to those types of investments, especially if you stay under the $100,000 (in some states higher) state guarantee amount.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.