Bucket two
The Stability Bucket
You won't touch this money for a few years — so it doesn't need to sit in cash. But you'll need it soon enough that it shouldn't be exposed to a bad market.
$310,000
You do not need this money yet, so it does not have to sit in cash. But you will need it soon enough that it should not be exposed to a market downturn.
This money’s job
Protect principal while earning a competitive, predictable return.
What that means
- Principal protection
- Predictable growth
- Reduced volatility
- Availability when this window arrives
| Feature | MYGA An insurance contract that pays a fixed rate for a set number of years. The rate is locked when you sign. | Conservative Model Mostly bonds with a modest equity allocation. Steadier, with lower expected long-term growth. |
|---|---|---|
| Expected return | 4.85% – 5.15% Guaranteed rate, by term | 4.9% Modeled |
| Rate certainty | Fixed by contract Locked for the full term when the contract is issued | Varies with markets No stated rate; results will differ from the assumption |
| Market downside | None Backed by the issuing insurer's claims-paying ability | Down to −20% Largest modeled decline, 1990-2025 |
| Liquidity | Restricted Typically 10% of contract value available annually without surrender charge after year one. | Daily Can be sold at any time |
| Term | 3 & 5 years Laddered across both terms | None No surrender period |
| Tax treatment | Tax-deferred Tax-deferred accumulation in non-qualified accounts; gains taxed as ordinary income on withdrawal. | Currently taxable Taxable unless held in a qualified account |
How to divide this bucket
It doesn’t have to be one or the other — and the annuity doesn’t have to be a single term. Move the sliders, or type a dollar amount, to split $310,000.
Laddered so each contract matures about when you need the money, with principal protected the whole way.
MYGA · 3 years
4.85% · Guaranteed rate
MYGA · 5 years
5.15% · Guaranteed rate
Conservative Model
4.9% · Modeled
Comparison assumptions
Advisor Mode only. Edits apply to this client’s scenario, not to your firm defaults, and the table above updates as you type.
MYGA
To add or remove a term, edit termOptions in src/config/strategies.ts.
Conservative Model
Modeled assumption, not a stated rate.
Annuity guarantees are backed solely by the financial strength and claims-paying ability of the issuing insurance company. They are not FDIC insured, not bank guaranteed, and not backed by any federal government agency.
A MYGA is an insurance contract, not a bank product or a CD. The rate is fixed for a stated term. Withdrawals above the contractual free amount before the term ends may be subject to surrender charges and a market value adjustment, and withdrawals before age 59½ may incur an additional 10% federal tax penalty.
This presentation is for discussion purposes and is not a recommendation to buy or sell any security or insurance product. Figures shown are estimates based on assumptions entered by your advisor and will differ from actual results.
Modeled returns are forward-looking assumptions, not projections or promises. No portfolio shown here is certain to achieve the return modeled, and any portfolio containing market investments can lose value.