- An annuity like MYGA can be a good replacement for a financial product like a CD, which doesn't offer much return for the cash or savings you don't need for day-to-day expenses.
- The money you pay into an annuity accumulates interest over time – your assets grow with that fixed interest rate. It’s not dependent on market fluctuations, which is comforting in today's volatile market.
- Your interest-based growth is all tax-deferred. Mathematically, you’re going to end up with more than you would if you invested in a taxable product, like a CD.
- Although the idea is to wait to collect payouts until the annuity matures or the interest rate guarantee period is over, you do have access to that cash. You can access a percentage penalty-free; if you need more, there will likely be a Market Value Adjustment (MVA) and/or a surrender charge. With an MVA, the issuer adjusts your interest rate based on current rates. A surrender charge is a penalty, usually a small percentage of the amount you withdraw.
In next blog post, we will show you more details of the Lincoln MYGA annuity.