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Retirement Withdrawal Strategies: MYGA

Stan Haithcock
July 31, 2023
Retirement Withdrawal Strategies: MYGA

Hi there. Stan The Annuity Man, America's annuity agent. Licensed in all 50 states. You know me, you love me, you trust me. You know I'm going to tell you the truth.

Today's topic is retirement withdrawal strategies. We're talking about MYGAs, Multi-Year Guarantee Annuities. We will go through how you can use MYGAs for your retirement withdrawal strategies. That's kind of hard to say. Retirement withdrawal strategies. How about that?

All right, we're back. We're laughing because people are tripping out over my shirt. I mean, the people behind the camera who are the intelligent people are behind the camera, they're like, we've never seen that shirt before." You've never seen Stonehenge, which should be called Stanhenge? Of course, you know Stonehenge, the mythical place, and I guess Stanhenge is the mythical place where annuities come together, and the facts and the truth meld into one with the supernatural powers that can only be told by Stan The Annuity Man, and trusted as a source. Exactly. I don't know what I just said, but it was good. I've been married for 33 years. Bless her heart. I've got two daughters, 22 and 24. So I'm sitting there one day, I'm like, "How about Stanhenge?" I mean, I'm always thinking about that. So, I love tee-shirts. The Stanhenge tee-shirt. That's it. That's a definitely digress.

Let's talk about retirement withdrawal strategies with Multi-Year Guarantee Annuities. What are Multi-Year Guarantee Annuities? As my very smart, ultra-smart CEO always tells me, she goes, "Stan, it's not a CD. It's a CD type." She's right. A Multi-Year Guarantee Annuity is a CD type. CDs are great. We don't sell them, but they're great. They're a guaranteed annual interest rate for a specific period of time. The annuity industry CD type is a Multi-Year Guaranteed Annuity. What is that? It's a guaranteed annual interest rate for a specific period of time that you choose.

Live MYGA Feed

Now, if you go to my site, you can click our live MYGA feed and see the live rates. You get two drop-downs, and you put in your state of residence and then put in the duration you want to see three or five years, and you can go back and forth and see them all 3, 5, 7, 10, whatever, 2, and you'll see the highest contractual guaranteed yields for that duration that you choose. It's listed from top to bottom, from the highest yield on down, and then you can see the ratings and all that stuff.

Now, when it comes to retirement withdrawal strategies, yeah, exactly, it's hard to say.

Peel off the Interest

With Multi-Year Guarantee Annuities, some MYGAs allow you to just peel off the interest like you do with a CD. You peel off the interest, let it hit your bank account, and never touch the principal. There are some that don't allow that, but they will allow you to take out, say, 5% per year penalty-free withdrawal or 10% per year penalty-free withdrawal. When you're looking at retirement withdrawal strategies, and you need some income to come in, and there's a lot of you out there go, "Hey, Stan, I don't want to lose a penny. I don't want to lose a penny. I've worked hard. I've saved, I've scrimped, I've sacrificed. I want my money to be intact, and I want to peel off the interest," then Multi-Year Guarantee Annuities work.

Now, at the time of this blog, look at the date; look down there, interest rates are at perceived lows. Compared to Jimmy Carter's interest rates, they are at lows, but it is what it is. It's based on current interest rates, and the 10-year treasury at the time of this blog is pretty low. Could it go lower? Yeah, it could. I hope it doesn't. I hope that rates will go up for all of you retirees and 10,000 people that are hitting 65 every day, which is a demographic tidal wave, but it is what it is.

Dynamic Pricing Model

One of the questions I always get from a retirement withdrawal strategy question using MYGAs is why are MYGA rates higher than CD rates? If a MYGA's a CD type of annuity, then why is it higher? It's because of a dynamic pricing model. Life insurance companies issue annuities. Life insurance companies then issue Multi-Year Guarantee Annuities, but life insurance companies have numerous tranches of business that they price off of. A lot of them sell life insurance. A lot of them sell lifetime income products like Immediate Annuities. They also have bonds from going way back that are not callable. I always tell people, there's Jimmy Carter, not Jimmy Carter Bonds, but Barack Obama bonds and all the Presidents, I mean, they have them that are callable that are at high percentage rates, and then so they take all of that plus the current interest rates, and they can price these guarantees to be higher than CDs at the time of this taping because it's a dynamic pricing model.

Retirement withdrawal strategies, if you don't want to touch a penny of the principal and you want to peel off the interest, when you go to my site and pull up my live MYGA feed within those columns, we will list if you can take out the interest or we will list if you can take out a specific percentage annually. It's very transparent. These are commodity products. No one's better than the other, and if it's made it to my site, I've done the due diligence and said, "Okay, for this duration, I sign off on this carrier." So you'll see A+ carriers, A++ carriers, A- carriers, B+ carriers, B++ carriers. I know what you're saying, "Well, why would I buy a B++ carrier and a B++ carrier?" It's because we're only marrying them, like getting married; we're only going to be with them for that specific duration. It's not like buying a lifetime income product.

There are occasions where a two-year MYGA with a B+ or a B++ company makes sense, and I sign off on it. Still, from a retirement withdrawal strategy, you can buy MYGAs and peel off the interest or take out a specific percentage depending on that specific product to satisfy those income needs or that money you need hitting your bank account every month.

Where Should I Take the Money From?

With MYGAs, you can use them in Roth IRAs, non-IRAs, and traditional IRAs. Often people ask me, "Where should I take the money from first? Should I take it from the IRA or the non-IRA?" There are no good answers to any of that, just bad sales pitches. It really comes down to your specific situation. I encourage you to set a time with me to talk and book a call. You get me for 30 minutes uninterrupted so that I can answer those questions, but you can't just carte blanchely say, "Hey, you should just take it from your IRA first." That's crazy.

Which Is the Best?

Another question I always get is, "Which is the best? Which one's the best to take from," etc? There really is no best MYGA, like which is the best duration or which is the best carrier. It really comes down to what you're trying to do. We often do ladders. If someone had $300,000, we'll do $100,000 in a two-year, $100,000 in three year, and $100,000 in a four year.

Required Minimum Distributions

The other question I often get with MYGAs is how about Required Minimum Distribution, RMDs? At the time of this blog, that's age 73. They have raised it from age 72 to age 73.

So when do I take it, or should I take it from Multi-Year Guarantee Annuities? Remember, with RMDs, and you know this. I'm just going to repeat it for the people that don't know, and this is good for you to know. With your IRA assets, they don't care if you take it in proportion with every single investment in your IRA. All they want is the percentage. Now, some Multi-Year Guarantee Annuities are RMD friendly. Some are not. Some are not set up for that. So you have to be upfront with me when you set a time to talk with me, "Hey, Stan, I'm going to buy this MYGA, but it has to be RMD friendly because I'm planning on taking my Required Minimum Distributions from that MYGA." We can do that. Not all of them are perfectly set up for RMDs, but many are. So you have to communicate with me about that.

Hey, as you know, on the Stan the Annuity Man YouTube channel, I do a ton of these videos because I want to educate the public on the truths, the facts, the brutal truth about annuities. No sales pitches. One of the cool things on the channel is that if you go to the playlist, there's a list of a bunch of Multi-Year Guarantee Annuity videos I've done. If you want to dig in and just totally get it and totally understand it before we talk. Also, if you go to my site , you can download my six owners manuals, one of which is on Multi-Year Guarantee Annuities. It's about 50 pages long. It answers every single question you have in your mind, the good, the bad, the benefits, and the limitations.

The key here is I'm trying to educate you so you can make an informed decision on your terms and on your timeframe. There's no hocus pocus, there's no Stanhenge. We're doing facts when it comes to annuities. I'm just having some fun with this. But I appreciate you joining me on this blog. Tell your friends and not friends, and I'll see you on the following Stan The Annuity Man blog.

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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