Does a recession affect me?

With growing concerns surrounding the future and the market many find themselves searching for safe investment options. A security where their investment can grow worry-free and not depend on the constant change within the market. With market volatility at an all- time high, inflation, and a possible recession, stress seems to be a feeling that is second nature. You might be thinking about putting off retirement or have growing concerns after suffering a recent loss. It’s time to reevaluate your risk tolerance and find safer investment options.

So, what’s out there?

Everyone’s immediate solution to help combat market volatility is CDs. With their guaranteed rates they are an easy solution that is both safe and promising. However, their return rates barely outpace inflation, and they lack liquidity during their term. What if there was an option that was similar to a CD but with higher rates of return and more liquidity?

That’s exactly what we are here to delve into! Multi-Year Guaranteed Annuities, also known as MYGAs. Both MYGAs and CDs offer guaranteed return rates and a guarantee of principle. The investment process is the same in that you invest a lump sum and receive a fixed rate of interest for a specific period of time(term). Where MYGAs and CDs differ is in relation to liquidity, compounding, and taxation.

At this point you might be asking “What is a MYGA?”

Multi-Year Guaranteed Annuity, or MYGA, is a type of fixed annuity that protects your premium and guarantees a specified return rate for a set number of years. MYGAs are a great fit for someone looking for a low-risk option that has growth potential and provides protection against a turbulent market. A MYGA works by investing a lump sum that accumulates interest at a guaranteed rate. Then at the end of your term you can withdraw the premium and interest earned.

Unlike CDs, MYGAs offer “Penalty Free Withdrawal” options during their term. This gives investors the option to withdraw a portion of their investment, penalty free, prior to the surrender period meaning more liquidity for the investor. Another benefit to MYGAs is that they grow tax deferred. This means you only pay taxes when you make a withdrawal. CDs are taxed annually within the account which can decrease the opportunity of growth. With higher rates of interest and taxation benefits MYGA’s have a higher potential for earnings. Flexible registration options are also available with a Multi-Year Guaranteed Annuity. Giving you an opportunity to move your 401k or IRA into a safe and guaranteed account.

If you are looking for a stable and protected investment option a multi-year guaranteed annuity (MYGA) might be the right fit for you. With record high-interest rates, protection from market volatility, and tax-deferred growth many find them to be the perfect way to diversify their portfolio. As with any financial product, you need to evaluate your financial goals prior to purchasing. A consultation with a trusted advisor is the first step in helping you find investment options that align with your financial strategy.