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The Federation of European Independent Financial Advisers

Investing is an essential part of wealth management and retirement planning, but the process is often complex and it can be difficult to know where to start. With an overwhelming number of investment options available and uncertainty regarding returns putting many first-time investors off, Multi-Year Guaranteed Annuities (MYGAs) could well be the answer for those who are nervous about beginning their investment journey; low-risk, flexible, and offering guaranteed gains, MYGAs offer predictability that other investment vehicles can’t.

What is an MYGA?

An MYGA is a form of fixed annuity that provides a guaranteed interest rate over a set number of years, guaranteeing a fixed return on investment. MYGAs provide a consistent stream of monthly income and so are particularly popular for those in retirement.

How do they work?

When purchasing a MYGA, you sign a contract with an insurance company in which you agree to pay an initial lump sum and in return, receive regular monthly payments over set period of your choosing, usually 3,5 or 10 years. In some circumstances, the contract will guarantee that if you die during the term of your guaranteed annuity, a selected beneficiary will receive a percentage of what you have already received from the multi-year annuity.

Are MYGAs right for me?

MYGAs can be bought by anyone up to the age of 85, but as mentioned previously, they are especially good investment vehicles for retirees and those over 60 due to the consistent income they provide. However, as they are not affected by market fluctuations, they are also a great option for any investor who wants to diversify their portfolio, or who is apprehensive about the risk associated with more volatile options.

Why should I invest in MYGAs now?

Due to rising inflation, interest rates are now higher than they have been in years, and whilst this does mean higher repayments on mortgages and loans, it can also work in your favor when it comes to returns on investments. By investing in an MYGA now, you can lock into the high interest rates and secure a comparatively high guaranteed return over your contracted period.


This article was kindly provided by Blacktower Financial Management Group and originally posted at:

The above contents and comments are entirely the views and words of the author. FEIFA is not responsible for any action taken, or inaction, by anyone or any entity, because of reading this article. It is for guidance only and relevant professional advice should always be taken before investing in any assets or undertaking any financial planning.