Individual bonds & CDs will do the same as a MYGA in practice. I will have to consider the taxation differences, but I get pretty decent rates in CDs with a milder penalty for breaking it.? No one said there was. But unlike bonds, you can get a guaranteed rate of return, whereas bonds fluctuate and can even lose you money. IMO that's a huge selling point forYou can buy a bond ladder for not much less. There is nothing magic about a MYGA.It can vary obviously compared to bonds, but in general, they're likely to get you more than a slightly higher rate of return as things stand right now.MYGA pros: Slightly higher interest rate, no loss of principal
MYGA cons: Surrender charges, all interest is taxable, subject to claims paying ability of insurance carrier
Re. surrender charges that's only a con if one takes too much money out of the MYGA, which defeats the purpose/point and makes no sense...take the money from elsewhere...and most investments are taxable, so that's not a con unique to MYGAs.
As you can tell, I'm on the MYGA train.And thanks to Stinky while I think of it for his great "mega thread" on MYGAs.
And thanks to Stinky while I think of it for his great "mega thread" on MYGAs.I would need to see if I can get comparable rates and flexibility in MYGAs at the scale I have.
I am not fond of bond funds personally because I do not like fees; also, I like to direct ownership of fixed-income as it is supposed to be there in distress.
Statistics: Posted by secondopinion — Sun Feb 16, 2025 10:19 pm