Purchasing MYGAs (multi year guaranteed annuities) - mega thread

[GaryA505]

OK all you MYGA-lovers!

I need to push some income into 2024 and beyond. I have a pretty good chunk of cash in a MUNI fund, but if I leave it there this year I will go over the first IRMAA cliff (due to tax-exempt interest getting included in MAGI for IRMAA). I also want to get set up for some possible MYGA-to-SPIA plays in the next 4-8 years or so. I'm not sure exactly when I want to start the SPIAs so I want some flexibility there (using shorter MYGAs that I can 1035 into new MYGAs to get to the start date for the SPIAs).

So, this is what I'm thinking:
$100k - t-bill(s), secondary market, can mature Jan 2024 or later, income taxed in 2024.
$100k - 2-year MYGA(s), at maturity can be 1035-exchanged into new MYGA(s).
$100k - 3-year MYGA(s), at maturity can be 1035-exchanged into new MYGA(s).

At maturity of the first MYGAs, they can be cashed out or 1035-rolled into another MYGA. For subsequent MYGAs, these can be cashed out at maturity or 1035-rolled into SPIAs when I'm ready for that.

Thoughts, opinions, rants, raves? Please don't mention a DIA because I'm not interested (yet). And yes, I'm aware that the interest from a MYGA, when rolled into a SPIA, isn't a "free lunch" because it will change the exclusion ratio of the SPIA.

I think that your plan for deferring taxable income is just fine.

One comment about IRMAA - it’s my understanding that your MAGI in 2023 will be used to determine your IRMAA surcharge for 2025. Further, the IRMAA breakpoints are adjusted upward each year for inflation. So maybe you’ll have more room in your 2023 MAGI than you think (because of the inflation adjustment) when it is used to calculate IRMAA. (Then again, maybe you’ve thought all this through already. In that case -never mind )

Thanks, I did think about it. And yes, the truth is that nobody knows the 2025 IRMAA numbers. I did find one source that predicted 2025 (for MFJ) at $206,000 for 0% inflation and $216,000 for 5% inflation. I suspect it will be somewhere in between, but I'm trying for the lower number if I can do it. It would be unfortunate if I went over the threshold by $1.

Edit: Here: https://thefinancebuff.com/medicare-irm ... ckets.html

[SlowMovingInvestor]

I have a MYGA maturing mid July. I want to do a 1035 rollover to another MYGA, very likely 3 year. Questions

1) I'm currently with Sammons/North American. Their current 3 year rate is 4.3% for a new MYGA.Would they offer the then prevailing rate for a new annuity if I ask for a rollover? In theory, they might even be able to offer a better rate since there should be no agent fee?

2) If I decide to go elsewhere, what are the logistical details? How far in advance of maturity do I need to start the process? Will the new company handle the rollover, or do I have to ask Sammons for a rollover, get a check made out to the new company and send it to the new company?

ADDED: I read the policy doc in detail. What it seems to say is that if I do nothing, the policy would be renewed at North American for the same period at the then prevailing rate for that policy type.

[suginami]

I’m seeing a lot of 3 year rates higher than that on blueprintincome.com or stantheannuityman.com.

[Stinky]

I have a MYGA maturing mid July. I want to do a 1035 rollover to another MYGA, very likely 3 year. Questions

1) I'm currently with Sammons/North American. Their current 3 year rate is 4.3% for a new MYGA is 4.3%?.Would they offer the then prevailing rate for a new annuity if I ask for a rollover? In theory, they might even be able to offer a better rate since there should be no agent fee?

2) If I decide to go elsewhere, what are the logistical details? How far in advance of maturity do I need to start the process? Will the new company handle the rollover, or do I have to ask Sammons for a rollover, get a check made out to the new company and send it to the new company?

ADDED: I the policy doc in detail. What it seems to say is that if I do nothing, the policy would be renewed at North American for the same period at the then prevailing rate for that policy type.

You’ll get a renewal offer from North American about 3 to 4 weeks before your renewal date. There’s not a whole lot you can do prior to that time.

Others have reported that their renewal offers from their current companies are lower than the rates that are being credited for new sales. Evidently, the insurance companies are trying to take advantage of policyholder inertia. No one on this Forum has yet reported on a renewal action by North American.

I definitely think you will not get a rate higher than what is being currently offered by North American on new business. We will see if North American offers you a lower rate than currently being paid on new business.

If you decide to do anything other than accept the renewal rate offer, you should get in touch with the agent that you plan to use for the new policy. Have them help walk you through the process of doing a 1035 exchange to a new product. They are the experts on doing such things.

While 4.30% rate for 3 years is lower than many rates quoted on the websites, it is the highest rate that I am seeing for a company rated A+ or higher.

Please post back as you go through the process of renewing your policy to let us know how things work out for you.

[SlowMovingInvestor]

I have a MYGA maturing mid July. I want to do a 1035 rollover to another MYGA, very likely 3 year. Questions

1) I'm currently with Sammons/North American. Their current 3 year rate is 4.3% for a new MYGA is 4.3%?.Would they offer the then prevailing rate for a new annuity if I ask for a rollover? In theory, they might even be able to offer a better rate since there should be no agent fee?

2) If I decide to go elsewhere, what are the logistical details? How far in advance of maturity do I need to start the process? Will the new company handle the rollover, or do I have to ask Sammons for a rollover, get a check made out to the new company and send it to the new company?

You’ll get a renewal offer from North American about 3 to 4 weeks before your renewal date. There’s not a whole lot you can do prior to that time.

Others have reported that their renewal offers from their current companies are lower than the rates that are being credited for new sales. Evidently, the insurance companies are trying to take advantage of policyholder inertia. No one on this Forum has yet reported on a renewal action by North American.

I definitely think you will not get a rate higher than what is being currently offered by North American on new business. We will see if North American offers you a lower rate than currently being paid on new business.

If you decide to do anything other than accept the renewal rate offer, you should get in touch with the agent that you plan to use for the new policy. Have them help walk you through the process of doing a 1035 exchange to a new product. They are the experts on doing such things.

While 4.30% rate for 3 years is lower than many rates quoted on the websites, it is the highest rate that I am seeing for a company rated A+ or higher.

Please post back as you go through the process of renewing your policy to let us know how things work out for you.

Thanks, Stinky. Very helpful

On a related note, I found this when searching around:

https://www.dplfp.com/products/products ... arketplace

They have 4.8-4.9% for Pacific Life, and 4.70% for Midland (which is just North American), both A+.

But I get the impression that clients can't buy directly from DPL, it's primarily meant for advisors.

Any comments on this firm?

[Stinky]

Thanks, Stinky. Very helpful

On a related note, I found this when searching around:

https://www.dplfp.com/products/products ... arketplace

They have 4.8-4.9% for Pacific Life, and 4.70% for Midland (which is just North American), both A+.

But I get the impression that clients can't buy directly from DPL, it's primarily meant for advisors.

Any comments on this firm?

Thank you for the link. Good catch!

While I’m not directly familiar with the DPL firm, I’m familiar with the marketing concept. I believe that DPL is offering products only through advisors who charge a fee to their clients. Scrolling down through the various pages on the site, I saw references to “fee-only” advisors and “no commission” products.

In other words, the interest rate on the linked products is higher because the insurance company doesn’t pay a commission to the advisor. Rather, the advisor makes his money by charging you a fee of some type.

And I believe that a consumer must go through an advisor to get these interest rates. They can’t go directly to DPL.

I expect that any advisor working through DPL would love to charge you a fee based on more of your assets than just MYGAs.

Once again, good catch on the website. Thanks for posting.

[BarbK]

Has anyone made an allowed 10% withdrawal from an MYGA in an IRA account back to the IRA? Was it worth the hassle?

Reason to do this is MYGA was set up in 2021 when rates were much lower. It's only 3 years so just one year left but getting 10% out now, and again in the beginning of year 3.

I haven’t. Maybe others have.

Give it a try and report back if you’re successful.

I didn't do the withdrawal from the IRA, but withdrew from a low interest rate Mass Mutual MYGA that has had several 1035 exchanges so anything out will be interest and taxable. Anyway, I submitted the forms via email attachment on May 4th and the $ was in my checking account May 8th. (The 6th and 7th were the weekend). Most of the $ was for paying Q2 estimated taxes, but kept some so I would know when it was handled. I am very impressed at the speed.

For the qualified MYGA, I thought of just withdrawing the $ for taxes, I am doing major Roth conversions so not sure.

[suginami]

Well….I’ve done it again. For the first time I decided to give Stan The Annuity Man a trial run and bought a 7 year MYGA with American National Life at 5.30% (for premiums above $100,000). American Life has the best rates out there right now and they’re A rated. This is my second MYGA at 7 years, but I just couldn’t pass up on the rate.

Stan spoke with me for about 30 minutes on the phone. He talks just like he does on his YouTube channel. His customer service department is leaps and bounds above Blueprint Income. If only he had a better website.

Just a quick, update. The request from American National to Vanguard for the money for the 7 year MYGA took them 3 days. I was stunned at the speed. The previous MYGA I purchased from American National took a month.

So far, Canvas is the only company that has my account set up. All of the others have received the funds, but still waiting for account information.

[indexfundfan]

My 3-yr MYGA from Oceanview is near maturity and I have been offered a renewal rate of 4.45% ("subject to change before renewal date"). This matches the current published rate on Blueprint.

[Stinky]

My 3-yr MYGA from Oceanview is near maturity and I have been offered a renewal rate of 4.45% ("subject to change before renewal date"). This matches the current published rate on Blueprint.

Who knows? Maybe Oceanview saw the negative comments on this Board?

I also have an Oceanview three year coming up later this year. We’ll see if they give me the same “deal”.

[DustyDebris]

Do we have any clues to where this money is being invested by the issuers? I assume corporate bonds. Was there some change in the rules that allowed these to come into being, I am curious what the back story is.

I just funded a 350k 7year with Canvas

[Stinky]

Do we have any clues to where this money is being invested by the issuers? I assume corporate bonds. Was there some change in the rules that allowed these to come into being, I am curious what the back story is.

I just funded a 350k 7year with Canvas

Life insurance companies invest primarily in fixed income assets. Corporate bonds lead the list, but they also invest in commercial mortgages, structured securities, etc.

MYGAs have been around for many years now. They gained significant popularity when interest rates were very low, and MYGAs paid very competitive yields compared to CDs.

Is your $350k MYGA within your state guaranty fund limit?

[DustyDebris]

Do we have any clues to where this money is being invested by the issuers? I assume corporate bonds. Was there some change in the rules that allowed these to come into being, I am curious what the back story is.

I just funded a 350k 7year with Canvas

Life insurance companies invest primarily in fixed income assets. Corporate bonds lead the list, but they also invest in commercial mortgages, structured securities, etc.

MYGAs have been around for many years now. They gained significant popularity when interest rates were very low, and MYGAs paid very competitive yields compared to CDs.

Is your $350k MYGA within your state guaranty fund limit?

[ quote fixed by admin LadyGeek]

My state has a $500k limit, so you know that means either NY State or WA State. I'm in WA.

[Stinky]

My state has a $500k limit, so you know that means either NY State or WA State. I'm in WA.

And if you were in New York State, you wouldn’t have purchased a MYGA from Canvas.

Because Puritan Life, like most life insurance companies, isn’t licensed to write business in New York.

[Stinky]

I received an email from Blueprint Income today, as posted below.

Most notable to me is the mention that they have "removed carriers that don't meet our service levels" from the platform. In particular, I've noticed that Americo, which has gotten numerous mentions upthread for slow service, no longer has any products listed on the Blueprint platform. I believe that Americo products remain available through other vendors.

We greatly appreciate your recent business with Blueprint Income. We have experienced an unprecedented surge in the annuity market over the past few months, resulting in historically high volumes across the industry. These volumes have caused delays in insurance carrier abilities in processing applications and transferring of funds, many times affecting the experience of our clients. We understand that these delays may have caused inconvenience and frustration, and for that, we sincerely apologize.

To address the situation and improve the experience of our customers, we are taking several steps:
o Increased staffing: We've expanded our workforce and trained additional personnel to effectively manage the high volumes, reducing turnaround times.
o Carrier evaluation and coordination: We've implemented measures with our insurance company partners to ensure prompt processing and have removed from our marketplace carriers that don't meet our service levels.
o Process and communication optimization: We're introducing a new “case management” role to provide more optimal and personalized service, enhancing transparency and clarity throughout the application to issuance process.

Please be assured that your satisfaction remains our top priority. Our dedicated team is working diligently to expedite pending requests and prevent any further delays. We are confident that these measures will lead to significant improvements in our service delivery.

We are grateful for the opportunity to serve you and are committed to providing the exceptional service you deserve. If you have any questions, concerns, or need assistance, please don't hesitate to reach out to our customer support team. We're here to help and ensure that your needs are met promptly.

[suginami]

I received an email from Blueprint Income today, as posted below.

Most notable to me is the mention that they have "removed carriers that don't meet our service levels" from the platform. In particular, I've noticed that Americo, which has gotten numerous mentions upthread for slow service, no longer has any products listed on the Blueprint platform. I believe that Americo products remain available through other vendors.

We greatly appreciate your recent business with Blueprint Income. We have experienced an unprecedented surge in the annuity market over the past few months, resulting in historically high volumes across the industry. These volumes have caused delays in insurance carrier abilities in processing applications and transferring of funds, many times affecting the experience of our clients. We understand that these delays may have caused inconvenience and frustration, and for that, we sincerely apologize.

To address the situation and improve the experience of our customers, we are taking several steps:
o Increased staffing: We've expanded our workforce and trained additional personnel to effectively manage the high volumes, reducing turnaround times.
o Carrier evaluation and coordination: We've implemented measures with our insurance company partners to ensure prompt processing and have removed from our marketplace carriers that don't meet our service levels.
o Process and communication optimization: We're introducing a new “case management” role to provide more optimal and personalized service, enhancing transparency and clarity throughout the application to issuance process.

Please be assured that your satisfaction remains our top priority. Our dedicated team is working diligently to expedite pending requests and prevent any further delays. We are confident that these measures will lead to significant improvements in our service delivery.

We are grateful for the opportunity to serve you and are committed to providing the exceptional service you deserve. If you have any questions, concerns, or need assistance, please don't hesitate to reach out to our customer support team. We're here to help and ensure that your needs are met promptly.

Interesting. I purchased a MYGA with Americo through Blueprint in late March. It took them a month to pull the money from Vanguard. It's been a little over a month since they received the funds, but I have had no communication from them that my policy has been set up.

[GaryA505]

I received an email from Blueprint Income today, as posted below.

Most notable to me is the mention that they have "removed carriers that don't meet our service levels" from the platform. In particular, I've noticed that Americo, which has gotten numerous mentions upthread for slow service, no longer has any products listed on the Blueprint platform. I believe that Americo products remain available through other vendors.

We greatly appreciate your recent business with Blueprint Income. We have experienced an unprecedented surge in the annuity market over the past few months, resulting in historically high volumes across the industry. These volumes have caused delays in insurance carrier abilities in processing applications and transferring of funds, many times affecting the experience of our clients. We understand that these delays may have caused inconvenience and frustration, and for that, we sincerely apologize.

To address the situation and improve the experience of our customers, we are taking several steps:
o Increased staffing: We've expanded our workforce and trained additional personnel to effectively manage the high volumes, reducing turnaround times.
o Carrier evaluation and coordination: We've implemented measures with our insurance company partners to ensure prompt processing and have removed from our marketplace carriers that don't meet our service levels.
o Process and communication optimization: We're introducing a new “case management” role to provide more optimal and personalized service, enhancing transparency and clarity throughout the application to issuance process.

Please be assured that your satisfaction remains our top priority. Our dedicated team is working diligently to expedite pending requests and prevent any further delays. We are confident that these measures will lead to significant improvements in our service delivery.

We are grateful for the opportunity to serve you and are committed to providing the exceptional service you deserve. If you have any questions, concerns, or need assistance, please don't hesitate to reach out to our customer support team. We're here to help and ensure that your needs are met promptly.

Interesting. I purchased a MYGA with Americo through Blueprint in late March. It took them a month to pull the money from Vanguard. It's been a little over a month since they received the funds, but I have had no communication from them that my policy has been set up.

Hmmm, looks like Americo is Ameri-slow.

[OkanePlease]

Mine took three months.

I received an email from Blueprint Income today, as posted below.

Most notable to me is the mention that they have "removed carriers that don't meet our service levels" from the platform. In particular, I've noticed that Americo, which has gotten numerous mentions upthread for slow service, no longer has any products listed on the Blueprint platform. I believe that Americo products remain available through other vendors.

We greatly appreciate your recent business with Blueprint Income. We have experienced an unprecedented surge in the annuity market over the past few months, resulting in historically high volumes across the industry. These volumes have caused delays in insurance carrier abilities in processing applications and transferring of funds, many times affecting the experience of our clients. We understand that these delays may have caused inconvenience and frustration, and for that, we sincerely apologize.

To address the situation and improve the experience of our customers, we are taking several steps:
o Increased staffing: We've expanded our workforce and trained additional personnel to effectively manage the high volumes, reducing turnaround times.
o Carrier evaluation and coordination: We've implemented measures with our insurance company partners to ensure prompt processing and have removed from our marketplace carriers that don't meet our service levels.
o Process and communication optimization: We're introducing a new “case management” role to provide more optimal and personalized service, enhancing transparency and clarity throughout the application to issuance process.

Please be assured that your satisfaction remains our top priority. Our dedicated team is working diligently to expedite pending requests and prevent any further delays. We are confident that these measures will lead to significant improvements in our service delivery.

We are grateful for the opportunity to serve you and are committed to providing the exceptional service you deserve. If you have any questions, concerns, or need assistance, please don't hesitate to reach out to our customer support team. We're here to help and ensure that your needs are met promptly.

Interesting. I purchased a MYGA with Americo through Blueprint in late March. It took them a month to pull the money from Vanguard. It's been a little over a month since they received the funds, but I have had no communication from them that my policy has been set up.

Hmmm, looks like Americo is Ameri-slow.

[Stinky]

I purchased a MYGA with Americo through Blueprint in late March. It took them a month to pull the money from Vanguard. It's been a little over a month since they received the funds, but I have had no communication from them that my policy has been set up.

Mine took three months.

I’m sure that Blueprint is sick and tired of getting calls from good folks like you who are properly peeved about the slow turnarounds from Americo.

It’s not Blueprint’s fault, but they’re the ones who get the disappointed customer calls.

[GaryA505]

I purchased a MYGA with Americo through Blueprint in late March. It took them a month to pull the money from Vanguard. It's been a little over a month since they received the funds, but I have had no communication from them that my policy has been set up.

Mine took three months.

I’m sure that Blueprint is sick and tired of getting calls from good folks like you who are properly peeved about the slow turnarounds from Americo.

It’s not Blueprint’s fault, but they’re the ones who get the disappointed customer calls.

I would see that as a plus for Blueprint Income, that they would exclude Americo for that reason. They could have just said, "well, it's Americo's fault".

[DDubya]

Had a good experience again buying MYGA at Canvas. DW and I applied in our tIRA on April 19. Our MYGA was funded on May 10.
So three weeks from start to completion, which I certainly consider satisfactory. This was entirely online and proceeded without any glitches; didn’t even have to use chat.
Better yet the investments are 5-year at 6.2%. This is well above their competitors and Puritan Life is rated B++, but my dollar amounts are well below the state limits. I certainly recommend Canvas to those not put off by the lower company rating.

[suginami]

Speak of the devil. My policy from Americo just arrived via Fedex today.

Here's the timeline:
Application submitted: 3/31
Funds sent by Vanguard: 4/14
Policy Contract date: 5/01
Policy Delivery date: 5/26

There you go.

[Stinky]

Speak of the devil. My policy from Americo just arrived via Fedex today.

Here's the timeline:
Application submitted: 3/31
Funds sent by Vanguard: 4/14
Policy Contract date: 5/01
Policy Delivery date: 5/26

There you go.

That’s pretty awful turnaround.

I know that Vanguard typically sends out checks within a day or two after they get the request for funds. So if the check didn’t go out until 4/14, that means that Americo sat on the paperwork for a week or so before they sent the request for funds to Vanguard.

Vanguard sends the check by snail mail. Presuming it arrived at Americo about April 18, the check sat at Americo for almost two weeks before it was processed. That establishes your policy issue date, when you began to earn interest.

Then, it took over three more weeks to issue the policy. You were earning interest during that time, but many customers would be fretting about actually getting a policy into their hands.

I expect that Blueprint got a lot of calls and messages from frustrated customers over turnaround like this.

[Stinky]

MYGA sales continue to set records. Sales in the 4th quarter of 2022 were up 217% from the 4th quarter of 2021.

Here’s an article with a lot of positive things to say about MYGA sales momentum. https://insurancenewsnet.com/innarticle ... enaissance

And here’s another article mentioning record MYGA sales I. The first quarter of 2023. https://insurancenewsnet.com/innarticle ... -says-wink

Bogleheads aren’t the only ones seeing value in MYGAs.

[GaryA505]

MYGA sales continue to set records. Sales in the 4th quarter of 2022 were up 217% from the 4th quarter of 2021.

Here’s an article with a lot of positive things to say about MYGA sales momentum. https://insurancenewsnet.com/innarticle ... enaissance

And here’s another article mentioning record MYGA sales I. The first quarter of 2023. https://insurancenewsnet.com/innarticle ... -says-wink

Bogleheads aren’t the only ones seeing value in MYGAs.

We're all about VALUE!