Chicken money in MYGA?
Since CD rates are terrible right now , would you consider MYGAs a good alternative for Chicken Money?
Stan the Man is showing about 3% for a 5 year. I currently have $200000 now in a 60 month CD at 2.75% that will be full term shortly. This money is not needed for anything but I am very conservative and don’t like loosing a dime. I would be very happy with the 3%. And what about the insurance company rating? Would you stay with only A rating or better or is B-, B, B+ sufficient? Also do you have to buy with a company in your state? I live in Illinois.
Thank you.
Terry Says
I’ve checked out those multi-year guaranteed annuities rates, and even called Stan considering one myself! The only drawback is that your money is tied up for that 5- year term, with penalties if you need to take the money out before that time. Stan will give you the top rated insurance companies.
Since “chicken money” is highly liquid, it doesn’t quite qualify on that basis — but I’m not concerned about safety if you stick with a top-rated insurer.
And no, it doesn’t make a difference what state the insurer is domiciled in. In fact, I can’t think of one top-rated insurer that is domiciled in Illinois!
Also remember, that money is growing tax-deferred inside the annuity. Unless you roll it over into another annuity at maturity, you will be liable for all the income taxes on the earnings when you take the money out.
