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Subject:  Re: Retirement Thoughts Date:  5/24/2022  3:13 AM
Author:  aj485 Number:  107528 of 108388

I did part of this with some MYGAs to cover the first 4-5 years.

I would point out that an alternative to MYGAs that also covers a several year period by providing specific amounts in each year would be to buy target date corporate bond ETFs, like IBDN - 2022; IBDO - 2023; IBDP - 2024; etc. iShares also has target date ETFs for muni bonds, Treasuries, and high yield corporate bonds, so you can get most any flavor you want. All of the bonds in the ETF are set to mature in the target year, and when all of the bonds have matured, the principal is disbursed to the shareholders. As long as you don't pay above par, and you hold to maturity, you will basically get your principal back (minus any defaults, which are likely going to be mostly in the high yield ETF). In the mean time, you will get cash flow from the interest the bonds pay. Average YTM for the corporate funds varies from 2.14% for the 2022 fund to 4.51% for the 2031 fund, and the expense ratio is 0.10% a year.

If you need to sell before maturity, it's quite easy to sell these - just like any other ETF. Yes, if the rates have gone up, you will probably suffer some principal loss vs. holding to maturity. But if you had to sell MYGAs early, I suspect that the surrender fees would just as bad, if not worse.

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