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Multi-Year Guaranteed Annuity (MYGA)

Multi-year guaranteed annuities are a type of fixed deferred annuity. In a fixed deferred annuity, you make one or multiple payments to your insurance company, which in turn, gives you a fixed return on your contributions, regardless of market fluctuations.

There is less risk involved in a fixed deferred annuity, which appeals to those who desire stability and simplicity. Because of their predictability, you’re able to calculate how much your annuity will grow over each guarantee period.

What are multi-year guaranteed annuities (MYGAs)?

A MYGA is a type of fixed annuity where you can choose from multiple guarantee periods when you purchase the contract. We currently offer three-, five- and seven- year terms and require a $5,000 minimum contribution. The interest rate you receive will be guaranteed for the entire term and will not change. The rate for the guarantee period will depend on the term you select and the size of your initial premium.

How do multi-year guaranteed annuities stand out?

While MYGAs may resemble bank CDs, there are a few key differences: 

  • The money you deposit in your MYGA is backed by the insurance company, while the money in a CD is insured by the FDIC up to $250,000.
  • Unlike MYGAs, CDs don’t have the benefit of tax-deferred growth.
  • With a CD, you may be penalized by the bank for withdrawals made before maturity. Amica allows for a penalty-free withdrawal up to 10% after the first year or Required Minimum Distributions (RMDs).

Multi-year guaranteed annuities offer the unique advantage of a predetermined guaranteed annuity rate, which will be fixed for the entire length of each guaranteed period.

Benefits and features

Why a multi-year guaranteed annuity?

  • Guaranteed income – You have the option to convert your annuity to income later while avoiding the risk of market fluctuations. You can also avoid longevity risk when you select a life contingent option. With an annuity, you have income you can count on.
  • Avoid additional fees – An Amica Life multi-year guaranteed annuity doesn’t have any front-end sales charges, service fees or annual administrative costs.
  • Tax-deferred growth – With a deferred annuity, you can earn more than in a taxable account with the same interest rate.
  • Fixed competitive interest rates are guaranteed during your term, regardless of market or economic conditions.
  • Flexible choices – You choose a plan for contributing and receiving your money that best fits your lifestyle.
  • Stability – Amica Life has received an A+ (Superior) rating from AM Best1, a leading authority on insurance company financial stability.

Term and renewal options

Multi-year guaranteed annuities give you flexibility. You can choose from multiple guarantee periods when you purchase the contract. With three-, five- and seven- year terms, you decide on a plan that best fits your lifestyle.

When your guaranteed period ends, you can choose a new period, depending on availability. The interest rate you receive may vary from your previous rate, but will be in line with the rates on new contracts. If you choose not to renew your MYGA, you can surrender your contract without surrender charges.

Tax considerations and withdrawals

The tax benefits of MYGAs are significant. Your money will grow tax deferred, and income taxes are only applied to your annuity payments.

After the first year, Amica allows you to withdraw 10% of your annuity value without penalty. Surrender charges may apply for withdrawals above 10% during the guarantee period. If you decide to withdraw money from your annuity before the age of 59½, you may be subject to a 10% early withdrawal penalty tax. It may be best to speak with a financial or tax professional before making any withdrawals.

If your MYGA is funded by non-qualified funds, like money from your savings account that has already been taxed, then you would only pay taxes on interest when withdrawn.

Is a MYGA with Amica right for you?

Multi-year guaranteed annuities benefit those who:

  • Have already retired or are close to retirement.
  • Are looking for an investment that will protect your principal from market fluctuations.
  • Desire the stability provided by fixed interest rates for a specified period.
  • Have long-term financial goals.

Multi-year guaranteed annuities provide a predictable and steady income that will give you financial peace of mind in your retirement. For more information, check out our downloadable FAQ sheet.

Planning your retirement doesn’t have to be complicated.

Let’s talk. Call 844-786-0697 and speak with an Amica Life annuity specialist today.

1 A+ (Superior) is the second highest of 13 company ratings. Ratings range from A++ (Superior) to D (Poor). AM Best's ratings measure an insurer’s financial strength.