There is a happy medium between the gains of the stock market and the safety at the bank. The right annuity can safely grow your retirement savings with no risk.
The following two annuity options are our top recommendations for adults over age 60. Unlike the stock market or variable annuities, MYGAs and FIAs are a safe place to put your retirement savings.
Multi-Year Guarantee Annuity (MYGA)
- Predictable: there are no “what ifs” here – a MYGA will deliver your agreed-upon interest rate for the contract length you choose.
- Zero risks: a fixed contract ensure you’ll never lose any of your principal – it will grow at a fixed rate for the term you choose.
- No fees: unlike variable annuities, there are no fees with a MYGA.
- Guaranteed interest rate: when your contract begins, your principal will start earning a guaranteed interest rate – you know you’ll be making a little on your money every day. Typical MYGA interest rates vary between 3-4% depending on how the market is performing.
- You can still access your money: many annuity companies offer withdrawal privileges, giving you access to up to 10% of your deposit after the first year.
Fixed Index Annuity (FIA)
- Potential to earn more: your earnings are based on how the market performs. When the market is up, you can make more on your deposit.
- Zero risks: the worst you can do with a FIA is to stay the same – you can never lose on your deposit.
- Gains are capped: to protect you from the losses of the stock market, the insurance company caps your gains. For example, if the S&P 500 goes up 10%, you may be capped at 6%. But if the S&P goes down 30%, you lose 0%.
- No fees: there can be fees with some FIAs, but the kind we offer to our clients have no fees and are the simplest to understand.
- Fluctuating interest rate: depending on the interest crediting strategy you choose, your interest rate will likely fluctuate with the market, but it can’t go below zero.