(New York)

One of the best ways to use annuities is in so-called “annuities ladders”. MYGAs are commonly used in this way with the goal of maximizing returns rates, but one good strategy involves mixing MYGAs with a fixed index annuity. A typical example would be to invest a total of $400,000 this way: $100k into a 3-year MYGA, $100k in a 5-year MYGA, $100k into a 7-year MYGA, and $100k into a 10-year fixed index annuity. MYGAs have contractually protected yields, and the hope is that the FIA will yield a bit better than comparative CDs. Both products fully protect principal.

FINSUM: This is a sound strategy for trying to maximize yield while minimizing risk since yields and principal are mostly locked in.