A deferred annuity is a savings vehicle that allows you to earn interest in a tax-deferred environment like a retirement account. Meaning the interest, you earn is not taxable until you pull it out. This is different than traditional savings vehicles like savings accounts and CD’s where you have to claim the interest you earn as income the year you earn it and pay tax on it.
A MYG works like a CD in that it guarantees the interest rate for a set period of time like 3 or 5 years. However, the interest is not taxable every year like a CD or savings account. The interest compounds and no taxes are due until you take the gain out of the account.
At the end of your fixed rate term, you have the option of pulling out your money and paying tax on the interest you have earned, or you have the option to continue the tax-deferral and roll your account balance into a new deferred annuity.
Some MYG annuities will allow you to pull out up to 10% of the account balance plus any interest you have earned without penalty. If you need your entire balance back before the end of your term, there will be a surrender charge assessed similar to how a CD works.
Yes, each state has a Guarantee Trust Association that guarantees balances up to the state limits that can be found through your state insurance commissioner’s website. Most guarantees are between $300 and $500,000 per contract depending on the state you live in.
No, your rate is fixed and guaranteed for the period of time you choose.
No, there are no fees or charges to open an account. 100% of your deposit will earn interest.
Please note, minimum deposit amounts are required to open a MYG deferred annuity.