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Is It Time to Consider a Multi-Year Guaranteed Rate Annuity?

The Comprehensive Advisor

February 2022

As we finish the first month of 2022, many clients might have concerns about market volatility and continued high inflation. This is the perfect time to review a timely idea to help you provide comprehensive financial advice.

If you are a fee-only advisor, the ideas we share below come in fee-only options as well. Rates vary with the product type and state. 

What is a Multi-Year Guaranteed Annuity?

A multi-year guaranteed annuity, or MYGA, is a type of fixed annuity that offers a guaranteed fixed interest rate for a certain period, usually from three to 10 years. A MYGA is appropriate for someone who is closer to retirement and prefers tax deferral and a guarantee of investment return. Let's take a look at two simple client profiles to consider. 

"The Conservative Client"

Most advisors have clients that don't want risk. Or clients that invest but still have a sizable allocation to cash or other fixed investments. A MYGA is a great alternative to CDs and other cash alternatives. For example, Pacific Life is currently offering a 2.3% 3-year rate annuity. We encourage you to compare this rate to your current CD and money market rates.  You can download the current Top MYGA rates below which discusses this option and more. Click here to download. 

"The Nervous Client"

After a three-year rally, the financial markets have been down to start 2022. While we know it is always important to stay the course, we imagine some clients cannot. The "nervous client" definition can also extend to bond fund clients that have continued concerns of rising rates and ultimately negative returns. A MYGA can be a great alternative to create a positive return in their asset allocation as compared to bond funds in a rising rate environment. 

Our mission at The Blueprint is to help you deliver a more comprehensive client experience. We specialize in working with RIAs and comprehensive financial advisors by incorporating risk management ideas with the same fiduciary approach. If you would like to learn more about MYGAs or how we can help you with other risk management conversations, please contact us here.