Multi-Year Guaranteed Annuities in Missouri

A Multi-Year Guaranteed Annuity (MYGA) is a type of fixed annuity that provides a guaranteed interest rate for a specific period, typically ranging from 3 to 10 years. It’s similar to a Certificate of Deposit (CD) but offers tax advantages, with interest typically accumulating tax-deferred. MYGAs are popular for retirement savings due to their principal protection and predictable returns.

Key Features of Multi-Year Guaranteed Annuities

Guaranteed Interest Rate: The core benefit is the fixed interest rate locked in for the duration of the contract.

Tax Deferral: Interest earned is not taxed until withdrawn, allowing for potentially faster growth.

Principal Protection: MYGAs are generally considered low-risk, protecting your initial investment from market volatility.

Fixed Term: The guaranteed interest rate is for a specific period, after which you can renew, withdraw, or annuitize.

Potential Surrender Charges: While some MYGAs offer penalty-free withdrawals, others may have surrender charges for early withdrawals.

Not FDIC Insured: Unlike CDs, MYGAs are not FDIC insured, but they are typically protected by state guaranty associations.

How It Works

Purchase: You purchase the annuity with a lump sum payment.

Interest Rate: The insurance company guarantees a specific interest rate for the contract term.

Growth: Your money grows with the guaranteed interest, compounding tax-deferred.

Withdrawal/Renewal: At the end of the term, you can withdraw your principal and interest, renew for a new term with a new rate, or annuitize (convert to a stream of income).

Who Might Benefit?

Retirees or those nearing retirement: MYGAs offer a safe way to grow savings and potentially generate income during retirement.

Individuals seeking predictable returns: If you prefer a guaranteed interest rate over market-linked investments, a MYGA could be a good fit.

Those looking for tax-deferred growth: If you want to delay paying taxes on your investment earnings, a MYGA can be beneficial.

Risks to Consider

Interest Rate Risk: If interest rates rise after you purchase, you might miss out on potentially higher returns.

Inflation Risk: The fixed interest rate may not keep pace with inflation over the long term.

Withdrawal Penalties: Be aware of potential surrender charges for early withdrawals.

Contact Hutchison Insurance Group today to discus your options for Multi-Year Guaranteed Annuities.