1. Accumulation Annuity
Accumulation annuities are designed to grow your money. These are a little different than the other 2 types of annuities we talk about, as most do not end with income payments.
The most common type of accumulation annuity we sell is a MYGA, or a Multi-Year Guaranteed Annuities.
MYGAs, sometimes called “CD Annuities”, offer you a guaranteed interest rate for a set period of time, typically 3-10 years. Interest rates for MYGAs are going to range anywhere from a little over 1% to over 3.5%
There are no hidden fees; you will see up front how much your money will be worth at the end of the term and the fees are included in this. MYGAs fully protect your principal from loss.
With MYGAs, once you transfer over a lump sum of money, which can range anywhere from around $15,000 to a max of $1,000,000, you just leave it there until the end of the term.
After the term of the accumulation annuity is up, you have the option to withdraw the money, renew the contract, or possibly convert it into an income stream.
Most retired clients we see have a significant amount of money just sitting in their savings account “just in case”. It is typically more money than you would need for an emergency situation.
For these clients, MYGAs work perfectly, as it gives them a place to put their money where it will be safe, they can possibly have access to it, but it will grow to keep up with inflation.
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