The phone calls started coming in early July. “George, I can’t sleep anymore. Every time I check my 401(k), it’s down another 3%. What if this keeps happening? What if I run out of money?“
Sound familiar?
If you’re anywhere near retirement, you’ve probably felt that familiar knot in your stomach when market headlines dominate the news. Geopolitical tensions, inflation fears, interest rate uncertainty…it seems like there’s always something threatening your hard-earned retirement savings.
But what if I told you there’s a way to sleep soundly, regardless of what’s happening on Wall Street? What if you could guarantee a portion of your returns for the next 3-7 years, completely immune to market volatility?
Enter the Multi-Year Guaranteed Annuity—or MYGA.
What Exactly Is a MYGA?
Think of a MYGA as the sophisticated cousin of a certificate of deposit. Like a CD, you deposit money and receive a guaranteed interest rate. But unlike a CD, your earnings grow tax-deferred, and the rates are often significantly higher.
Here’s how it works: You transfer funds to a highly rated insurance company, and they guarantee a fixed interest rate for a predetermined period—typically 3, 5, or 7 years. Your principal is 100% protected, your interest rate is locked in, and your money grows without the daily drama of market fluctuations.
No checking account balances obsessively. No losing sleep over geopolitical events. Just predictable, guaranteed growth.
Why MYGAs Are Having Their Moment
After spending 25+ years in retirement planning, I can tell you that timing matters. Right now several factors are making MYGAs particularly attractive:
Interest Rate Environment: We’re seeing MYGA rates in the 5-6% range—significantly higher than the near-zero rates of just a few years ago.
Market Volatility: With ongoing uncertainty, many retirees are seeking the stability that only guaranteed products can provide.
Institutional Recognition: Major firms like JPMorgan, BlackRock, and Vanguard are now incorporating annuity solutions into 401(k) plans—a clear signal that guaranteed income is becoming mainstream.
Real-World Example: Sarah’s MYGA Ladder
Sarah, 62, came to me with $400,000 in her 401(k). She was three years from retirement but couldn’t sleep at night. Every market dip felt like a personal attack on her future security.
“George,” she said, “I can’t afford to lose money this close to retirement, but I also can’t afford to earn nothing.”
We developed a “MYGA ladder” strategy:
- $100,000 in a 3-year MYGA at 5.2%
- $100,000 in a 5-year MYGA at 5.8%
- $200,000 remained in diversified investments
The results? Sarah now has $200,000 growing at guaranteed rates while maintaining growth potential with the remaining funds. More importantly, she sleeps well knowing her retirement “floor” is secured.
MYGA vs. Your Alternatives
MYGA vs. CDs: Your $100,000 in a 5% CD generates $5,000 in annual interest—all taxable immediately. The same $100,000 in a 5.5% MYGA generates $5,500 in tax-deferred growth. After accounting for taxes, the MYGA advantage becomes even more pronounced.
MYGA vs. Traditional Fixed Annuities: Traditional fixed annuities guarantee rates for just one year, then adjust (usually down). MYGAs lock your rate for the entire 3-to-7-year term. Predictability wins when you’re planning retirement income.
The Inflation Question
“But, George, what about inflation?” It’s the most common concern I hear about MYGAs.
Here’s my perspective:
- Guaranteed 5.5% beats potential 0% during a market crash.
- Tax-deferred growth effectively adds 1-2% to your real return.
- MYGAs are one piece of a diversified strategy—not the entire strategy.
- MYGA laddering lets you capture future rate increases as terms expire.
Inflation is a risk, but so is market loss. The key is balance.
When MYGAs Make Sense (and When They Don’t)
MYGA Sweet Spot:
- Ages 50-70 (peak accumulation years)
- 3-7 years from retirement
- Emergency fund fully funded
- Market anxiety affecting your sleep
- Attractive interest rate environment (like now)
When MYGAs Don’t Make Sense:
- You need immediate liquidity
- You’re under 45 with long timeline
- You haven’t maximized 401(k) matching
- You’re comfortable chasing maximum returns
The Psychology of Guaranteed Returns
Here’s something I’ve learned: The emotional value of guaranteed returns often exceeds their mathematical value.
Consider two clients:
- Client A: $200,000 earning 7% average in the market
- Client B: $200,000 earning 5.5% guaranteed in a MYGA
Mathematically, Client A should be happier. But Client B sleeps better, doesn’t obsessively check balances, and isn’t stressed by financial headlines.
Sometimes the “lower” guaranteed return is actually higher when you factor in behavioral mistakes that market volatility can cause.
Current MYGA Rates
As of mid-August 2025, here’s what I’m seeing from top-rated carriers:
- 3-Year Terms: 4.8% – 5.4%
- 5-Year Terms: 5.2% – 5.9%
- 7-Year Terms: 5.0% – 5.7%
These rates are significantly higher than recent years, but they won’t stay here forever. Economic conditions change, and rates adjust accordingly.
Getting It Right
If you’re considering a MYGA, evaluate these factors:
Insurance Company Rating: Stick with A+ rated carriers. Your guaranteed returns are only as good as the company behind them.
Term Length: Match the term to your timeline. Need money in 4 years? Don’t lock it up for 7.
Surrender Charges: Most MYGAs allow 10% annual withdrawals penalty-free, but understand early withdrawal penalties.
Laddering Strategy: Consider multiple MYGAs with different maturity dates for flexibility.
The Bottom Line
MYGAs aren’t right for everyone, but for those who value predictability and peace of mind in a portion of their portfolio, they can be powerful tools.
The question isn’t whether you should put all your money in MYGAs. You shouldn’t. The question is whether a strategic allocation to guaranteed products makes sense as part of your retirement income plan.
As someone who has helped protect over $1 billion in retirement assets, I’ve seen how the right guaranteed income strategy can transform a stressful retirement into a confident one.
The market will continue to fluctuate. Headlines will continue to create anxiety. But with a well-planned MYGA strategy, you can sleep soundly knowing that at least a portion of your retirement is guaranteed.
Because in an uncertain world, a little certainty goes a long way.
Retirement Protection Strategies Can Help You Plan a Stress-Free Future
Retirement should be a time of relaxation, not worrying about outliving your savings.
Retirement Protection Solutions can help you make sense of these tax-efficient strategies so you can focus on enjoying retirement. Whether you’re just starting to plan or looking to refine your approach, I’m here to help you save taxes in retirement. To schedule a meeting, call (216) 272-2333, email george@retirestressfree.com, or schedule online.
About George
George McFadden is the principal at Retirement Protection Solutions, a financial advisory firm in the Greater Cleveland area focused on guiding clients in the “Retirement Red Zone”—those nearing or entering retirement who need protection, reasonable growth, and guaranteed retirement income. With over 25 years of experience working alongside top financial advisors across the U.S., George saw a significant gap in traditional retirement planning. His mission is to fill that gap by helping clients protect their hard-earned savings and create a reliable retirement paycheck that lasts for life.
Many advisors offer a broad array of investment services that expose clients to market risk, often leaving those approaching retirement vulnerable. George’s value proposition is different: he emphasizes protection, ensuring clients don’t lose their principal, and offers guaranteed retirement income solutions to provide lasting confidence and peace. In partnership with Retirement Realized, George brings clients strategies that focus on safety and security, designed specifically for those who want to retire stress-free without relying on risky market-driven approaches. George is passionate about educating retirees on their income options, answering their questions, and separating fact from fiction. He believes the best benefit he provides to clients is a guaranteed retirement income that lets them sleep soundly at night.
Outside of the office, George enjoys golfing, biking, hiking, fly fishing, and boating. He is also deeply committed to supporting research for a cure for Type 1 Juvenile Diabetes, inspired by his daughter’s battle with the disease. To learn more about George, connect with him on LinkedIn.