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MYGA-2-SPIA for Full-Control Annuity Income: Shootin' It Straight With Stan

Stan Haithcock
December 6, 2023
MYGA-2-SPIA for Full-Control Annuity Income: Shootin' It Straight With Stan

Welcome to Shootin' It Straight With Stan. I am your host Stan The Annuity Man, America's annuity agent, licensed in all 50 states. Today's topic is something that I have created that is good and that the public loves, and I need to tell you about it. Once again, it's called MYGA to SPIA for full control, lifetime income, MYGA to SPIA. Let's break that down.


‌A MYGA is a Multi-Year Guarantee Annuity. It's the annuity industry's version of a CD. Don't make it any more complex than that. You can go to my site at and pull up the live MYGA feed to see what a two-year, three-year, four-year, five-year, six-year, seven-year, eight-year, nine-year, 10-year MYGA lock-in will yield. It's not an income annuity; it's a CD-type annuity of which, with many of the MYGAs, you can just take the interest off the top.

‌The good news about Multi-Year Guarantee Annuities is that the annual interest rate is locked in and non-callable. So, when interest rates eventually do go back down, check the timing of this blog, and they will go down because interest rates go up and down, you're going to be locked in. They can't call it back. That's a Multi-Year Guarantee Annuity.


‌SPIA means Single Premium Immediate Annuity. It's the granddaddy of all lifetime income annuities. It all started in Roman times, where ANNUA meant payment, and the original Single Premium Immediate Annuity was put in place for a pension payment to the dutiful Roman soldiers and their families for laying it on the line for the empire. And that specific structure has been sold in this country for hundreds and hundreds of years. It's a commodity product. Annuities are contractual commodities, meaning that when you buy them for the contractual guarantees, we can then shop all carriers for the highest contractually guaranteed payout for your specific situation based on how we structure it.

‌Income Rider

‌But the reason that MYGA to SPIA and this strategy is so popular right now is one that I want you to learn more about. And if you don't know about it, you need to know because the current hot thing out there for agents and advisors to sell is what's called an Income Rider. There's nothing wrong with Income Riders. We probably sell more Income Riders than anybody on the planet, and typically, it's attached to an Index Annuity of which we really don't care about. We use that as a delivery system for the Income Rider because, again, we only look at the contractual guarantees of the policy. Once we do that, we'll have commoditized the policies, and we can shop all carriers for the highest contractual guarantee. But with Income Riders comes an annual fee for the life of the policy, and that's the reason annuity companies have the big buildings.

‌And that annual fee comes out of that accumulation value, not the income value, but the accumulation value doesn't make Income Riders bad, but the Income Rider is monopoly money, number one. That side that's growing so mightily over there on the income side, you can't cash that in. You can't tap into it from a liquidity standpoint. You can only use that large amount to calculate that first-lifetime income payment. That's what an Income Rider does.

‌The 4 Ways

‌I always ask people two questions: "What do you want the money to contractually do? When do you want those contractual guarantees to start?" If someone says, "I want income to start in three years, five years, seven years, 10 years," there are four ways to do that.

‌One's a Deferred Income Annuity, one's an Income Rider, one's wait, wait, wait until you need the income and then buy an Immediate Annuity. But the fourth way is MYGA to SPIA. Let's get down to how that works.

‌A Multi-Year Guarantee Annuity is a CD product. Let's say, "You know what? I am pretty sure we're going to need a lifetime income stream in five years or seven years," but for example purposes, let's say five, "And we might need some liquidity during those five years." I'm like, "Okay." So, we look at my site, live MYGA feed, fixed rates. Look at the five-year and the ones with liquidity provisions like taking out interest or taking out 10% penalty-free. That way, you lock in a guaranteed interest rate. You never touch the principal, you never pay a fee, and you have the ability to take out penalty-free. The interest is usually up to 10% penalty-free, depending on the specific MYGA. That's something we'll have to discuss.

‌Non-Taxable Event Transfer

‌During that five-year period, you're not paying any fees; you're protecting the principal and can say, "Peel off interest." At the end of that duration, at the end of the five years, we can at that point in time, if the goal is lifetime income, shop all SPIA carriers. You go to my site, run a SPIA quote, and we transfer the MYGA to the SPIA. So, the cost basis from the MYGA goes to the Immediate Annuity, non-taxable event transfer. You can use IRA money, non-IRA money, or Roth IRA money; it doesn't matter. It's a non-taxable event transfer from the MYGA to the SPIA. We get to the fork in the road moment at the end of the duration, and you say, "You know what? I think me and the wife just want a lifetime income. We want to lock it in. And so, we're going to transfer it from the MYGA to the Immediate Annuity after quoting all Immediate Annuity carriers for the highest contractual guarantee, and also quoting the MYGA carrier," to see if they offer an internal Immediate Annuity where you're at. That's a good thing.

Now, we can get to that fork in the road moment. At the end of the duration, we're going to call you 60 days prior and say, "What do you want to do? Do you still want to do the SPIA at the end?" You might say, "You know what? No, we're just going to roll this to another MYGA," or "No, we're going to move this back to where it came from." Let's say it was an IRA at Vanguard; we will move it back to the IRA at Vanguard. Once again, non-taxable event transfer. "What have you done here, Stan, The Annuity Man?" That's a good question. What I've done is stripped out all fees. There are no annual fees on a MYGA. There are no annual fees on an Immediate Annuity at all. And the older you are, the higher the payment with Immediate Annuities. Can we run what the Immediate Annuity quote will be in the future? No, because that makes no sense because you can't run a future Immediate Annuity quote.

‌Control the Asset

‌But the reason that a MYGA to SPIA works for a lot of people is they fully control the asset. They fully control the asset until it's time to turn on income or buy an Immediate Annuity at that time. If you've seen the Braveheart movie with Mel Gibson and the British are coming at him, and they're in a line, and he's saying, "Hold, hold, hold, hold." Remember that? And then at the end, he goes, "Fight," or "Go get them," or "Kill them," or whatever. What you're going to say is, "Hold, hold, hold, hold." And then I'm going to say, "Is it time for the Immediate Annuity lifetime income?" You're going to say, "Yes," and then we will transfer it. But up until then, you have full control over the asset. So, the question is, "Stan, why wouldn't I just buy a Deferred Income Annuity now with income starting five years from now?" You can do that. There is absolutely nothing wrong with that because, to the penny, that lifetime income stream will be five years from now.

‌Irrevocable Contract

‌The downside to a Deferred Income Annuity is that it's an irrevocable contract. There's no trackable interest during that time period that you're deferring. There's no liquidity. It's a pension that you're starting five years from now. My question is, is it that important to know what the payout is going to be five years from now? If you say yes, then we buy it. If you say not really, then MYGA to SPIA works. I can't guarantee that the SPIA will be higher, but I can guarantee that you will fully control the asset between now and then, which might be more important than locking in that income stream right now, and things might change five years from now. You say, "Well, wait a minute. This local guy says just buy an Index Annuity and buy an Income Rider, and you'll know to the penny what it's going to be down the road." He's right, she's right. Nothing wrong with that. We quote those, too.

‌You can go to my site, and quote Income Riders all day long, the best ones. But once you do that, you own that Indexed Annuity. That Income Rider amount is always going to be higher than the accumulation value, meaning that if you wanted to cash out or transfer it, the Income Rider amount, that high amount is not transferable. It's monopoly money. And there's a fee for the life of the policy. MYGA to SPIA, to me, is fully controlling the asset and fully controlling lifetime income in the future. And you get to turn it on when you want to turn it on. With an Income Rider, you bought the Income Rider, you paid for the Income Rider, you're going to turn it on because that's why you bought it. But with a MYGA to SPIA, you could do a double dip. Let me explain that.

‌Double Dip

‌Let's say you say, "Okay, I want to do income in 10 years from now." You buy a MYGA for 10 years, at a non-callable interest rate. And you say, "Stan, I'm going to peel off the interest every single year from that MYGA and never touch the principal." So, when we reach the 10 years, you have all your money intact. Why? Because you haven't been paying anything in fees. It's a principal protection product, and we can then shop for Immediate Annuities. You've been taking interest off the top. And then, at the end of the 10 years, we annuitize it; for lack of a better phrase, we transfer it to an Immediate Annuity for a lifetime income. And remember, with Immediate Annuities, we can structure that in myriad of ways, over 40 ways. We can structure it life with cash refund, joint with life with cash refund, installment refund, period certain, whatever you want, and customize it to your heart's content contractually. But I want you to consider MYGA to SPIA. Why do other agents not show this? I don't know. My opinion is it could be lazy, it could be commissions, whatever.

But MYGAs and SPIAs had the lowest built-in commissions. All annuity commissions are built in but have the lowest built-in commissions of all annuity types, so maybe that's it. But to me, for you, you need to be looking at it a little differently. You can have your cake and eat it too, just a little bit here, just a few bites. You can protect the principle. You can peel off interest if needed during that duration of the MYGA. And at the end of that term, you have full control of the asset. You can get the money back; you can transfer it back to where it came from. You can transfer it to another MYGA, an Immediate Annuity, or a Deferred Income Annuity. There's a myriad of things that you can do, but you get to that fork in the road moment, and you still have full control over the money that is MYGA to SPIA. Go to my site, pull up the live MYGA feed, go to my site, and run SPIA quotes.

‌If you want to get fancy, you can say, "Okay, five years from now, I will be five years older." You can run the quote showing you five years older. That's the closest we can get. But to understand that lifetime income products like Immediate Annuities are about life expectancy, interest rates play a secondary role. MYGA to SPIA. Something the industry needs to embrace because, guess what? The public's embracing it. All 50 states that listen to Stan The Annuity Man's embracing it, and we want to talk to you about it. If you answer the question, "I need income, and I need it later," MYGA to SPIA might be your solution. That was Shootin' It Straight With Stan. My name is Stan The Annuity Man, America's annuity agent. We'll see you next time.

Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.

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