Mike Milligan compares MYGAs and CDs, explaining why annuities often win. MYGAs offer higher rates and state insurance backing, but the real edge is tax deferral: CD interest gets taxed yearly as ordinary income, while MYGA earnings compound untaxed until withdrawal.
Not only are tax rates or interest rates higher on MYGAs currently than they are with CDs, they also come with the backing of the state insurance guarantee. Well, but then there's the tax treatment. And let me talk to you about tax treatment for a second. Rate isn't the whole story. The tax treatment is where MYGAs quietly pull away from, for a lot of my listeners. With a CD, the interest that credits each year is taxable to you in that year as ordinary income, even if you leave it in the CD and don't spend a dime. With a MYGA, the interest grows tax-deferred. You don't get a 1099 every year. You owe tax when you take the money out. That means you're earning interest on your interest before the IRS ever takes a bite.
How to evaluate AI growth stocks (Nvidia, Oracle, CoreWeave) beyond market hype
How to evaluate AI growth stocks (Nvidia, Oracle, CoreWeave) beyond market hype
