The American Pathway Advisory MYGA provides multiple durations (3, 5 or 7 years) to help advisors accurately address the needs of the portfolio.
The Market
Since their introduction in the Commission-Free space, MYGAs (multi-year guaranteed annuities) have become one of the most popular DPL Member solutions for improving fixed income allocations. Generating reliable returns above today’s yields1 for a lesser duration, these simplified products can help advisors gather assets that would otherwise be held in cash or CDs, protect principal from market volatility, and ultimately improve portfolio performance.
Why DPL Likes the American Pathway Advisory MYGA
The American Pathway Advisory MYGA offers multiple guaranteed interest rates, including one of the shortest durations (3 years) on DPL's platform. Premium is protected from market downturns and accumulates tax-deferred, allowing for greater growth potential when compared to traditional fixed income instruments like bonds. This product also offers a market value adjustment (MVA)2 with a free withdrawal privilege. The minimum premium required is $25,000.3
How to Think About Commission-Free MYGAs
When your client needs:
PRINCIPAL PROTECTION: MYGAs are typically used for clients nearing or in retirement, as they protect principal from market downturns, yet provide a minimum guaranteed rate of return.
FIXED INCOME: MYGAs provide a consistent stream of income for clients that are looking to de-risk their portfolios from equities.
CASH REPLACEMENT: MYGAs can be used instead of cash investments, such as CDs or money market funds, to help generate better returns subject to the terms of the contract.
Product information provided by Corebridge Financial.
1 MYGA rates available through DPL compared to US Treasury Yield Curve, and comparable CDs via BankRate.com.
2 A market value adjustment applies during the three-, five- and seven-year interest guarantee rate terms. The one-year interest guarantee term does not have an MVA. The MVA is an adjustment that can either increase or decrease the withdrawal amount depending on the current interest rate environment. When interest rates at the time of withdrawal are higher than the level at the beginning of the MVA term, the MVA will result in a decrease. If interest rates are down, the MVA will increase the withdrawal amount. Should an MVA decrease apply, the amount charged will not result in your receiving less than the minimum withdrawal value as defined in your contract. MVA does not apply to withdrawals representing penalty-free withdrawal amounts, RMDs, annuitization or death benefit. An external index referenced in your contract is used to measure rates.
3 $25,000 premium minimum to $2,000,000 maximum apply to both qualified and non-qualified plans. A premium of more than $2,000,000 may be accepted with prior approval from Corebridge.
Guarantees are based on the claims paying ability of the insurance company
A fixed annuity is a contract between you and an insurance company that, in exchange for your premium (earning a fixed rate of interest), offers a stream of guaranteed income payments.
Annuities are long-term products designed for retirement.
Retirement accounts such as IRAs can be tax deferred regardless of whether or not they are funded with an annuity. The purchase of an annuity within an IRA does not provide additional tax-deferred treatment of earnings. However, annuities do provide other features and benefits.
Withdrawals may be subject to federal and/or state income taxes. A 10% federal early withdrawal tax penalty may apply if taken before age 59½ in addition to ordinary income tax. Partial withdrawals may reduce benefits and contract value.
This material is general in nature, was developed for educational use only, and is not intended to provide financial, legal, fiduciary, accounting or tax advice, nor is it intended to make any recommendations. Applicable laws and regulations are complex and subject to change. Please consult with your financial professional regarding your situation. For legal, accounting or tax advice consult the appropriate professional.