Multi-Year Guaranteed Annuities, or MYGAs, are the latest product now available from Catholic United Financial, and our Members are asking good questions about it.
Who should be adding this kind of annuity to their financial plan? A MYGA can be a good fit for a conservative or later-life investor looking for a short-term opportunity to reduce risk, generate guaranteed earnings, and reduce their tax footprint.
Annuities are known for stability since the products involve guaranteed minimum rates of return. Traditional fixed-rate annuities are secure, retirement income-producing contracts held for long-term — often for the life of the owner. A MYGA offers that same stability, but with a significant difference. The term of the MYGA contract, along with guaranteed interest rates, is locked in for five years. The ability to park money for this time period, while earning at fixed rates and deferring taxes on those earnings, is a useful option for many.
What’s the difference between a MYGA and a bank CD? The two are often compared and share similarities. Both are designed for short-term savings. Both involve fixed interest rates. Both can be renewed at the end of the contract term. However, a MYGA offers liquidity options not found in a CD. The owner of our MYGA who is 59½ or older can take up to 10 percent withdrawals from the MYGA (after the first 12 months) without penalty.* Most CD-issuing institutions either don’t allow withdrawals, or charge fees for early withdrawals. Another significant difference is that since MYGAs are annuities, a MYGA owner can choose to annuitize at the end of the contract, which will produce a stream of retirement income for the owner for life.
Is a MYGA right for you, right now? Your local Member Advisor can sit down with you and craft a MYGA plan that works for your goals and situation. Call 1-800-568-6670 to be connected to your local Member Advisor today or click here to search by zip code.
*Surrender charges and/or government penalties may apply on withdrawals. Up to 10% of the accumulated values may be withdrawn without surrender charges during any policy year except the first. See contract for details. $10,000 minimum deposit required. Catholic United Financial does not offer tax or legal advice. Talk to your tax advisor or attorney about your specific situation. Insurance products issued by Trusted Fraternal Life, Milwaukee, WI. Not available in all states.
