5. CD or Savings Alternatives
1. Indexed Annuities – Designed for Accumulation – SAFE FINANCIAL INSTRUMENT (Insert Link to Article – Safe vs risky $)
2. MYGA – Multi-Year Guaranteed Annuity – SAFE FINANCIAL INSTRUMENT
What is an Indexed Annuity for Accumulation? (These can be acquired as an asset in IRA’s, 401(k)’s and other Qualified Plans)
Indexed Annuities – Have Index Options with No Cap – We’ve seen returns much higher north than 10%, again, with NO STOCK MARKET RISK.
NOTE: Accumulation Indexed Annuities can also be turned on for Guaranteed Income; or a “Guaranteed Paycheck for Life.”
Some Indexed Annuities are better designed for Maximum Income right now, others are designed for Maximum Accumulation being most important, and then in future, potentially turning on for income.
If your plans change, you can 1035 exchange the “Accumulation Annuity” for an “Income Indexed Annuity” that might be giving you a higher “Guaranteed Paycheck 4 Life.”
2. What is a MYGA (Multi-Year Guarantee Annuity)
Do you know how many Banks went out of business after the 2008 recession?
Answer = 465
Do you know how many Life Insurance Companies (that also offer Annuities) went out of business after 2008 recession?
Answer = ZERO – NONE
Do you trust your “safe money” in a CD with a bank or a Life Insurance Company? Life Insurance Companies are arguably the “cornerstone of the stability of the global financial world.”
What is a MYGA (Multi-Year Guaranteed Annuity)?
A fixed annuity, also known as a multi-year guaranteed annuity (MYGA), provides a guaranteed rate of return for a predetermined period of time. It is most similar to a Certificate of Deposit (CD) that is offered by a bank or other-FDIC insured institution, except that it is offered by an insurance company.
What other types of Fixed Annuities exist:
Fixed deferred annuity (FDA)
Fixed rate annuity
Multi-year guaranteed annuity (MYGA)
Single premium deferred annuity (SPDA)
NOTE: Variable Annuities are considered an “At-Risk Financial Instrument,” whereas, a “Fixed Indexed Annuity” is considered a “Safe Financial Instrument.”
Good rule of thumb to make this difference simple:
Variable = Directly Invested in the stock market (At-Risk Financial Instrument)
Fixed – Not Directly Invested in the stock market, but has chance for Stock Market Type returns (Safe Financial Instrument) – Fixed financial tools are typically called “Savings Vehicles” since they technically are not Investments, since you can’t lose your money due to bad stock market returns…GUARANTED!