Fixed annuity (MYGA) vs index annuity (FIA)

A MYGA (multi-year guarantee annuity) pays one fixed rate for a set term. An FIA (fixed index annuity) ties interest to an index.

1. 1.

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   Using Annuities Genius: I'm an independent agent paid by commission. My client is 64 in Pennsylvania with $120,000 non-qualified. She may need some of it in 3 to 4 years and hates the idea of losing money. Compare the best 3-year and 4-year MYGAs from carriers rated A- or better with 10% free withdrawals, and the best no-fee S&P 500 FIAs. For each, show the rating, surrender years and free withdrawals. Look up how each one is sold, and flag any fee-based (Advisory) product. Tell me which one you'd show her first and why. I decide.

   Date every figure. Mark every figure you worked out yourself. If you cannot reach Annuities Genius, say so and give no figure.

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2. 2.

   Read both lists. Check the rating, the surrender years, the free withdrawals and how it is sold.

   Surrender years: when leaving early costs a charge. Free withdrawals: what you can take out without one, and from when.

3. 3.

   Match the years. Surrender years should end when she may need the money. Index annuity surrender years too long? Ask for 4 or less.

   Index annuities often run 5 years or more. Asking for 4 or less finds shorter ones.