Introduction
A Multi-Year Guaranteed Annuity (MYGA) is a type of fixed annuity that provides a guaranteed interest rate for a specified number of years, typically ranging from 3 to 10. Unlike variable or indexed annuities, where returns are linked to market performance, MYGAs offer a steady, predetermined return over the selected term. This feature makes them popular among conservative investors who seek predictable, low-risk growth of their assets, particularly in a retirement context.
MYGAs work similarly to Certificates of Deposit (CDs) in terms of fixed interest rates and defined maturity periods, but they offer additional benefits that make them attractive as retirement planning tools. MYGA funds grow on a tax-deferred basis, meaning that investors do not pay taxes on their gains until they begin making withdrawals. This allows the investment to compound more effectively over time, providing a distinct advantage over taxable investments with similar yields. Additionally, MYGAs offer the benefit of principal protection, ensuring that the initial investment is safe from market fluctuations.
This review will dive into the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA), exploring its key features, benefits, and considerations.
The review of the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) will be broken into multiple subcategories:
- Product Description
- Product Policy
- Rates and Costs
- Riders
- Benefits vs. Disadvantages of MYGA Compared to a Traditional Fixed Annuity
- Company Details
- Conclusion
Product Description
The Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) is a financial product designed to meet the needs of conservative investors seeking a stable, guaranteed return over a specific period.
Let’s have a look at the high-level fine print of the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA), and then we will discuss each point in detail.
| Product Name | Select Max MYGA |
|---|---|
Issuing Company | Symetra Life Insurance Company |
AM Best Rating | A (3rd of 13 ratings) |
Withdrawal Charge Period(s) | 3, 5, and 7 year |
Surrender Charge Schedule | Varies as per withdrawal charge period |
Maximum Issue Age | 85 Years |
Minimum Initial Purchase Amount | $10,000 |
Plan Types |
|
Free Withdrawals | Accumulated interest earned (minus previous interest withdrawn) can be withdrawn free of charge |
Death Benefit | Upon the annuitant’s death, the beneficiary will get higher of: (1) full Account Value without any surrender charges (2) guaranteed minimum value |
Riders | Free Terminal Illness and Nursing Home Confinement Waiver |
Surrender Value | Account Value less any withdrawal charges/ MVA |
RMD Friendly | Yes |
Renewal Conditions | Option to continue with the MYGA for the same guaranteed period after the initial guaranteed period ends, but at the new rates available at that time |
The features of the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) remain consistent across all term durations, with the only variations being the interest rates and the withdrawal charge schedule associated with each term.
Product Policy
How does the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) policy work?
The Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) is structured to provide fixed, predictable growth over a chosen period, making it a suitable option for investors looking for security and stability. This annuity offers term options ranging from 3 to 7 years, with a unique interest rate assigned to each term. These rates ensure that the policyholder knows exactly how much their investment will grow over the selected period.
Let’s have a look at the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) Annuity rate sheet (as of January 2025) to understand how the earnings are determined.
- 3-Year Term: 4.05%
- 5-Year Term: 4.70%
- 7-Year Term: 4.70%
Please note that these rates apply to the Low Band ($10,000 - $49,999). For the Higher Bands ($50,000+), refer to the rate chart below for detailed information. The more you invest, the higher band you qualify for, which offers a higher interest rate. The Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) is available in 3-, 5-, and 7-year terms, allowing for flexibility based on your financial objectives.
Important: Rates are subject to change. To ensure you have the most accurate and current information, please consult your trusted financial advisor before making any investment decisions.
The MYGA’s interest rate is locked in at the start of the contract and remains fixed for the entire term, ensuring a steady accumulation of funds. At the end of the selected period, the policyholder has several options: they may withdraw the accumulated funds, renew for another term (with rates based on prevailing conditions), or roll the funds into another financial vehicle.
Key Mechanics of the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) Policy
- Interest Rate Lock: Once the policyholder selects a term, the corresponding interest rate is guaranteed for the duration of that term, providing clear expectations for growth.
- Principal Protection: As a fixed annuity, the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) guarantees the protection of the principal, meaning that the initial investment is secure and unaffected by market volatility.
- Withdrawal Charge Schedule: The policy includes a withdrawal charge schedule, which varies according to the selected term. If the policyholder needs to access their funds before the term ends, they may incur a penalty. However, many MYGAs, (but not Symetra Select Max), often allow a penalty-free withdrawal of a certain percentage of the account value each year, typically up to 10%. In case of Symetra Select Max annuity, the annuitant can only withdraw accumulated interest earned (minus previous interest withdrawn) free of charge.
To understand how the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) works, let’s look at a hypothetical example:
Suppose an investor, Louise, is 60 years old and is planning to retire soon. She wants a low-risk investment to grow her funds predictably over time. After researching her options, Louise decides to invest $100,000 in the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) with a 7-year term, which offers a fixed interest rate of 5.00% for that period.
1. Interest Accumulation
With her $100,000 initial investment, Louise can calculate her future value at the end of the 7-year term using the 5.00% annual interest rate:
- Year 1: $100,000 * (1 + 5.00%) = $105,000
- Year 2: $105,000 * (1 + 5.00%) ≈ $110,250
- Year 3: $110,250 * (1 + 5.00%) ≈ $115,763
- Year 4: $115,763 * (1 + 5.00%) ≈ $121,551
- Year 5: $121,551 * (1 + 5.00%) ≈ $127,628
- Year 6: $127,628 * (1 + 5.00%) ≈ $134,010
- Year 7: $134,010 * (1 + 5.00%) ≈ $140,710
After seven years, her investment would grow to approximately $140,710, thanks to the fixed annual interest rate of 5.00%.
2. Principal Protection
Because the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) is a fixed annuity, Louise’s initial $100,000 is fully protected from market losses. Regardless of what happens in the stock or bond markets, her principal remains secure, and she continues to earn the 5.00% fixed rate annually.
3. Withdrawal Options at the End of the Term
At the end of the 7-year term, Louise has several choices:
- Withdraw the Full Amount: Louise can withdraw the full $140,710 without any surrender charges, giving her access to her accumulated funds.
- Renew for Another Term: Louise can choose to renew her MYGA for another term with Symetra, though the new interest rate will depend on the prevailing rates at that time.
- Roll Over to Another Financial Product: Louise can transfer her funds into another investment or retirement product, if she desires.
Riders
The Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) comes with two riders at no additional cost, providing policyholders with flexibility and support during critical life events.
- Terminal Illness Waiver: After the first contract anniversary, if the contract owner is diagnosed with a terminal illness and is not expected to live more than 12 months, any applicable Market Value Adjustment (MVA) and surrender charges will be waived on withdrawals. The terminal illness must be diagnosed by a qualified physician after the contract’s issue date, and proof of the diagnosis must be provided to Symetra Life Insurance Company.
- Nursing Home Confinement Waiver: After the first contract anniversary, if the contract owner requires nursing home confinement, any applicable MVA and surrender charges will be waived on withdrawals. To qualify, the confinement must last at least 30 consecutive days or include no more than a 6-month break if spread over multiple periods. The confinement must be prescribed by a qualified physician as medically necessary, and proof must be provided to the company during confinement or within 90 days afterward.
Surrender/Early Withdrawal Charge
The Symetra Select Max MYGA allows free annual withdrawals of accumulated interest earned (minus any previously withdrawn interest). This feature is slightly less favorable compared to other annuities that typically allow free annual withdrawals of up to 10% of the contract value without charges.
Should your needs change unexpectedly, and you need to take an excess withdrawal (a withdrawal that is above the free withdrawal amount available in a given contract year), you may be entitled to access additional monies, although certain charges and penalties may apply. Any amount withdrawn in excess of the remaining free withdrawal amount is subject to a Surrender Charge. Below is the Surrender Charge schedule for the Symetra Select Max Multi-Year Guaranteed Annuity (MYGA).
| Completed Contract Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11+ |
|---|---|---|---|---|---|---|---|---|---|---|---|
7-yr | 8% | 8% | 7% | 6% | 5% | 4% | 3% | 0% | |||
5-yr | 8% | 8% | 7% | 6% | 5% | 0% | |||||
3-yr | 8% | 8% | 7% | 0% |
Market Value Adjustments - In case you need to surrender your policy, a Market Value Adjustment (MVA) will be applied to the portion of the withdrawal or surrender that exceeds the free withdrawal amount during the withdrawal charge period.
Contract/Administrative Charge
The Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) levies no annual contract or administrative fees.
Benefits vs. Disadvantages of MYGA Compared to a Traditional Fixed Annuity
MYGAs and traditional fixed annuities both cater to conservative investors but with slightly different structures. MYGAs are ideal for those who want a predictable rate over a fixed term and are comfortable with the limited liquidity during that period. In contrast, traditional fixed annuities may offer a bit more flexibility in terms of rate adjustments or income options but typically lack the defined multi-year guarantee MYGAs provide. Here’s a breakdown:
Benefits of MYGA
Guaranteed Interest Rates for Specific Terms
- MYGA: MYGAs provide a guaranteed interest rate over a fixed term, such as 3, 5, or 7 years, allowing investors to lock in predictable returns for a specified period.
- Traditional Fixed Annuity: Traditional fixed annuities also offer guaranteed interest, but these rates are often set for a shorter duration (e.g., one year) and may reset annually based on prevailing rates.
- Benefit: MYGAs offer more stability over a multi-year horizon, protecting against interest rate fluctuations, which is particularly beneficial in a low or falling interest rate environment.
Flexibility with Term Lengths
- MYGA: MYGAs provide the flexibility to choose from different terms (e.g., 3, 5, 7, 10 years), depending on the investor's needs and market outlook.
- Traditional Fixed Annuity: Traditional fixed annuities do not typically offer fixed terms with guaranteed rates over multi-year periods.
- Benefit: MYGAs allow investors to align their investments with specific time horizons, such as short-term goals or bridge periods before retirement.
Disadvantages of MYGA
Interest Rate Risk Over the Long Term
- MYGA: While MYGAs lock in rates for a specific term, they may be less advantageous if interest rates rise significantly during the term, as policyholders are bound to the initial rate until maturity.
- Traditional Fixed Annuity: Traditional fixed annuities may offer rate adjustments periodically, which could benefit policyholders in a rising interest rate environment.
- Disadvantage: MYGAs might not benefit from increasing rates mid-term, whereas traditional fixed annuities may adjust rates periodically, providing some adaptability to market changes.
Lower Growth Potential Compared to Market-Linked Annuities
- MYGA: MYGAs have a fixed interest rate and are not linked to market performance, limiting the growth potential.
- Traditional Fixed Annuity: Similarly, traditional fixed annuities are also fixed, but they may sometimes offer interest rate adjustments that allow for slightly higher yields over time.
- Disadvantage: Both MYGAs and traditional fixed annuities limit growth potential compared to market-linked annuities or other investment options, which may not be ideal for younger investors with higher risk tolerance.
Company Details
You must always keep in mind that, unlike CDs, annuities are not guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other federal insurance agency. An annuity's "guarantee" is only as strong as the insurance company that issues the annuity, so it is always important to assess the issuing company before buying an annuity.
Symentra Life Insurance Company
Symetra Life Insurance Company, established in 1957, is a U.S.-based provider of retirement plans, employee benefits, annuities, and life insurance. Headquartered in Bellevue, Washington, Symetra operates through a network of independent distributors nationwide. In 2016, Symetra was acquired by Sumitomo Life Insurance Company, one of Japan's leading life insurers, for $3.8 billion. This acquisition has strengthened Symetra's financial foundation, enabling strategic growth and product development.
Symetra offers a diverse range of products tailored to individuals and businesses:
- Life Insurance: Term life, indexed universal life, and variable universal life policies designed to provide financial protection and flexibility.
- Annuities: Fixed, fixed indexed, and immediate annuities aimed at delivering stable income streams for retirement planning.
- Employee Benefits: Group life, disability, and medical stop-loss insurance solutions catering to employers seeking comprehensive benefits packages.
It is rated as follows by the rating agencies:
| Rating Agency | Rating |
|---|---|
AM Best | A |
Moody's | A1 |
S&P Global | A |
Symetra Life Insurance Company’s financial strength is reflected in the following figures as of FY2023:
- Total Assets: $63.7 billion
- Investment Portfolio: $51.3 billion
- Investment Grade Portfolio: 96.9%
- Stockholder’s Equity: $2 billion
- Employees: 2500+
Going by the operating history, financial numbers, and ratings, we can safely gauge that you can trust your savings with the Symetra Life Insurance Company.
Conclusion
With the advancement in healthcare and technology, the average person today is living longer than ever. So, it’s very important to have a stream of income that can grow safely and steadily and have the ability to provide a guaranteed income during the retirement years. This not only helps you mitigate the risk of outliving your income but also ensures that you continue to live a decent life even in your retirement.
The Symetra Select Max Multi-Year Guaranteed Annuity (MYGA) offers a decent option for investors prioritizing stability while maintaining access to funds during critical situations. Notable features include riders such as the Terminal Illness and Nursing Home Confinement waivers, which provide flexibility by allowing penalty-free access to funds during unforeseen health challenges. However, the absence of a standard 10% free annual withdrawal option makes it slightly less competitive compared to other MYGAs. Overall, with its high credit ratings and rich history, this product remains a practical choice for those seeking dependable growth and essential protections in their retirement strategy.
We understand that choosing the right annuity can be a complex decision, influenced by a myriad of factors such as market conditions, individual financial goals, and evolving life circumstances. To better serve you in this critical decision-making process, we regularly conduct in-depth reviews of various annuity products, examining features, costs, and potential benefits. Dive deeper into our extensive reviews.