Is a MYGA Better Than a Bank CD?

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Hello America. Stan the Annuity Man. I'm

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America's annuity agent, licensed in all

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50 states, including the one that you're

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sitting in that I'm assuming is very

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beautiful and picturesque. Nod your

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head. Of course. All right, producer.

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What do you think of the shirt? I found

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this humorous. Get it? Get it? Do you

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get it? It's a bone. Humorous bone. Got

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it? Hey, enough about that. It's that

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simple. The simplicity of the shirt is

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what we're going to be talking about

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today. the simplicity of multi-year

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guarantee annuities and how they work.

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And oh, by the way, multi-year guarantee

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annuities are the industry's version of

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a CD, a certificate of deposit. So, if

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you hate all annuities, then I guess you

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hate all CDs, which

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is probably not the case. So, with that,

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I'll be back in two seconds. I've got my

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trusty pen. I'm going to sprint, crawl,

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climb to the whiteboard, and we're going

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to break this thing down after

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[Music]

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this. All right. Since multi-year

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guarantee annuities are the industry

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version of a CD, certificate of deposit,

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by the way, great story. My mom, 81

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years old, St. Augustine, Florida. And I

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just, you know, I don't like doing

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business with family because then when

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you go to the family gatherings, all

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they talk about is business. So people

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like, "Well, don't you sell your mom

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migas cuz she's a CD buyer." Uh, no.

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Because I don't want my mom saying,

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"Hey, can you help me explain this? It's

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a CD, Mom. It's a guaranteed interest

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rate. Love my mom. 81 years old. She

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goes to the bad chicken dinner seminars

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and eats all the agents food. I really

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appreciate that. But should she buy

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migas? If she wasn't my mom, I'd sell

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her a ma. But she's my mom. You don't

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sell your mom anything. You know better

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than that. All right, let's talk about

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mas and CDs. You know, a producer, can I

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go from that side and right? Cuz see,

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I'm not left-handed. What do you think?

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Nod your head. No, you you said no. And

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now you're saying, okay, here we go. As

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they say, I was going to say I'm not

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amphibious. It's ambidextrous, but I was

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going to try. Okay, I'm not amphibious.

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Ma, principal protection. I'm just going

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to put

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PP CD, principal protection. What does

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that mean? You're not going to lose any

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money. That's a good thing. Number two,

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what's the difference? What's the same?

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So, this is the same. This is the same.

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Um, duration. You can choose your

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duration. Choose I'm not going to put C

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CD because that makes no sense. So, you

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can choose your

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duration. What does that mean? Stand in

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English. That means if you want a

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one-year CD, you can choose it. If you

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want a three-year MIGA, you can choose

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it. Oh, by the way, the differences

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between these two is that typically this

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the shortest term ST is 2 years that you

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can buy with a CD. Shoot, I'm assuming

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you can do three month, six month,

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whatever. I mean, you can really do some

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short-term stuff over here, which is

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great. I love CDs. I don't sell them,

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but I love them because they protect

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your principal, and in this time, that's

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a good thing. So do mo multi-year

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guarantee annuities. Did you hear the

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word thing, producer? I said thing.

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That's that North Carolina thing coming

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out. Okay.

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So, those principal protection,

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principal protection, choose your

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duration, choose your duration. 2 years

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is the shortest. You can go to uh as

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short as three and six months. Now,

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what's the difference between the two?

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Those are kind of the same. Oh, by the

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way, no fees. Are there commissions in

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both? Yes, there are commissions in

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both. There's no philanthropist out

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here. I'm getting paid if I sell you

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one. This the banker's getting paid if

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they sell you a CD. And that's okay.

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It's built in and hidden from the

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client. I'm not sure that's okay, but

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that's just the way it is. Meaning that

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if you put $100,000 in AmA, you see

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$100,000 on your statement, but I did

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get paid a little bit from the company

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one time, you don't ever you don't ever

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see it. Same thing with CD. Put $100,000

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in, you see $100,000 go to work. Did the

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adviser or bank or broker get paid? Yes,

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they did. So, no fees. There are

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commissions on both, but in

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essence, they're pretty much the same

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product. So, what's the difference? In

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two seconds, after I clean this board,

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I'm going to show you. All righty then,

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as Jim Carrey says in the movie, let's

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look at CDs and MAS in different types

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of accounts and how they perform. First

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of all, the guarantees are the same. The

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interest rate guarantees are the same in

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every

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single account, right? So, in an IRA,

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you put a CD in an IRA, you put a

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multi-year guarantee annuity in an IRA,

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the interest grows tax deferred on both.

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In a Roth, and you can put it in a Roth,

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you can pull out the money anytime. You

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can take it out taxree. But here's the

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difference. Here's where the rubber

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meets the road, Miss Producer. With a CD

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and a

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nonIRRA, you have to pay taxes on the

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interest. Taxes, taxes, taxes annually.

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with a multi-year guarantee annuity and

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a

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nonIRRA

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deferred. Does it mean it's better than

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a CD? No, it doesn't mean it's better.

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But there's a lot of people that want

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guaranteed fixed returns annually, but

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they don't want to pay taxes on the

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interest. Now, are you going to have to

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pay taxes when you pull it out? Yes, you

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are. But you can defer them. You can

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push that tax puck down the ice. hockey

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analogy. Now, I'm going to clean this

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board and then I'm going to tell you

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some lading strategies that you can work

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with both CDs and MAS. All right, so

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multi-year guarantee annuity CDs are

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kind of the same thing. They're just

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some issues from the standpoint of which

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account you use in issues meaning

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taxation. Remember, in a nonirra setting

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with CDs, you have to pay taxes on the

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interest annually. And with multi-year

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guarantee annuities, those taxes are

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deferred. Doesn't make it better, just

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that's the difference. Now, let's look

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at some lading strategies. The way that

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I look at I don't sell CDs, but I love

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them. You can go to I I think the best

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source for CD rates is

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bankr.com. I do not get paid by bank. I

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don't I not know anybody there. They

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should send me a gift for that. But if

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someone says, "Stan, what's the best CD

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rates?" That's where I pull

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bankrate.com. Where's the best migrates?

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Yeah, you guessed it.

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Theanuityman.com. But if someone said,

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"Hey, I want to ladder maturities,"

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which you know, people sometimes ladder

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bonds and you know, I even ladder income

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with annuities, but that's a whole

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another story. But let's say, "Hey,

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let's maximize interest rates with a

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ladder. How would you do that on a

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fiveyear?" So, let's just say someone

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said, "Okay, I've got a half a million

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dollars and forget the account type

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because the account type, you know,

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whatever the account is. We've already

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talked about the non-qualified and the

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IRA and and the Roth IRA, but it's

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500,000. What I would tell them to do

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is, okay, let's put a

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$100,000 in each trunch for lack of a

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better phrase. You have a one year, a

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two-year, a three year, a four year, a

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5year duration. Okay? So, in the one

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year, you put 100. Two year, you put a

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100, etc. So, you're splitting up the

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500 over this duration time period. Now,

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to maximize interest rate, historically,

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this is what you would do. You'd buy a

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$100,000 CD, a $100,000 CD on the

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two-year, and then the next three

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tanches would be MAUS. Historically,

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would you shop all rates to see the

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best? You know, who has the best rates

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in these tanches? Yeah, but

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historically, CDs win in that short-term

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duration. And you could even do the

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latter differently. You could say, I

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want a six-month and a 12-month, and you

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know, you could do it any way you want,

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but you're buying the highest yield. And

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this is typically how that ladder would

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look from a just maximizing duration and

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maximizing yield. This would be a great

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fixed rate ladder for a portfolio. All

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right, let's talk about claims paying

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ability because that's important. It's

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important to my mom. She loves FDIC

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insurance. She doesn't know what it is,

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but she loves it because she feels warm

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and fuzzy and that's all that matters,

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right? So CDs are backed by

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FDIC, Federal Deposit Insurance

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Corporation. And people, the tinfold

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hat, people out there say, "But Stan,

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the government's in debt and blah blah

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blah and da da da." Trust me, that's the

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best coverage on the planet. Now, how

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are multi-year guarantee annuities

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covered? By the state guarantee fund,

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and each state has a guarantee fund. I'm

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going to give you the address of where

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to go to find it because each state is

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different, of course. There it is. www.

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nolhga.com. nolhga.com.

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And there you can pull up your specific

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state of residence. There'll be some

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frequently asked questions. They list

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them as FAQs. And then you can pull up

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what the coverage is for your specific

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state. And it's per policy, per owner,

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per company. But that's the way to look

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at. And typically you'll see anywhere

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from a $100,000 coverage up to $250 or

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$300,000 coverage for multi-year

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guarantee annuities. But in my perfect

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world of unicorns chasing the

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butterflies, annuity unicorns chasing

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annuity butterflies, always buy your

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multi-year guarantee annuity based

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primarily on the claims paying ability

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of the issuing

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carrier, not this state guarantee fund.

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In fact, the industry frowns upon very

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severely. They do not like agents

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saying, "Buy this multi-year guarantee

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annuity because there's a state

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guarantee fund." Okay? And they

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certainly don't want the agent saying

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buy the multi-year guarantee annuity

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because the state guarantee funds like

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FDIC. It's not. It's not. FDIC is

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better. Doesn't mean CDs are better, but

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is better coverage in my opinion. All

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right. I've done another multi-year

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guarantee annuity video about rates,

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migrates. I'd encourage you to take a

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look at that. But also, let me send you

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this book, Multi-year Guarantee

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Annuity Owner Manual. And on the back,

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that's me. 40 pounds ago with a cool

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annuity man steakhouse shirt. Producer,

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on the back of that, it says, "Own the

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steak, not the sizzle." It really does.

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But I'm going to not only send you the

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multi-year guarantee book, but I'm going

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to send you the other five annuity

10:11
owners manuals that I have published on

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Amazon, but I'm going to send them to

10:15
you for free if you go to

10:15
theanuityman.com and sign up there.

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Please hit the subscribe button as you

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listen to this music, and I'll see you

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on the next video.