Annuities in Retirement Planning (FIA vs SPIA)
Definitions Term Meaning FIA (Fixed Indexed Annuity) A deferred annuity that credits interest based on the performance of a market index (like S&P 500), often with a guaranteed minimum interest rate. MYGA (Multi-Year Guaranteed Annuity) A deferred annuity that offers a fixed interest rate guaranteed for a set period (typically 3–10 years), regardless of market performance. 2️ . Key Features Comparison Feature FIA MYGA Interest / Growth Linked to market index performance, often capped or with participation rate Fixed guaranteed interest rate for contract term Principal Protection Guaranteed minimum (usually 0–1%) Full principal guaranteed Risk / Market Exposure Some upside potential (index-linked), minimal downside None; fixed return Tax Treatment Tax-deferred growth until withdrawal Tax-deferred growth until withdrawal Liquidity...