Fixed Annuity vs Bank CD (Which Fits Your Retirement Dollars?)
Both protect principal, but a multi-year guaranteed annuity (MYGA) can offer tax deferral and often higher credited rates for longer terms. Here’s a side‑by‑side so clients (and nosy in-laws) get it fast.
Fixed (MYGA) Annuity
- Rate Range (Current Market): 5.15% – 6.10% (multi-year)
- Tax Treatment: Tax-deferred until withdrawal
- Access: Typically 10% free withdrawal annually
- Guarantees: Backed by insurer; state guaranty association coverage (limits apply)
- Use Case: Pre‑retirees wanting predictable accumulation
Pros
- Often higher net growth vs CDs (after tax deferral)
- Flexible payout options later (income potential)
- No annual 1099 while funds stay inside
Cons
- Surrender charges if exiting early
- Taxed as ordinary income on gain when withdrawn
- Not FDIC insured (but has state guaranty backstop)
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Trusted Annuity Insight
Jason has distributed more than $1.5 billion in annuities over his 20 year career. His mission is to democratize access to annuities for all Americans and provide a safe and simple way to purchase an annuity.
