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It is always hard to know the exact product someone is talking about, especially with annuities. Over the last 2 years I've bought two 3-yr annuities. They are paying me around 2.4% per year. One will come due when I turn 60 and the other when I'm 61.

I'm hoping to be retired around 60 so these will help cover my expenses for my first 3-5 years of retirement (along with a pension).

2.4% isn't great but with current CD rates it looked good. Since I don't invest much in bonds my money tends to be either in the stock market or sitting in cash waiting for opportunities to invest.

The amounts fit within the state insurance limits (not that I'm ever 100% sold on things being guaranteed) so that provides some security.

Some refer to these as MYGA (multi-year guaranteed annuity). Could I make more in the market or with a 60/40 portfolio? Maybe but I didn't see it worth taking that risk. The economy and the market are not particularly stable IMO.

As far as "catch" goes I think there are several reasons why many prefer the lower rate of CDs or want to avoid a MYGA:
1. Not insured by FDIC
2. Penalties for early withdrawal (CD penalties are pretty low)
3. More difficult to obtain
4. People are afraid of annuities (in many cases for good reasons)
5. Not all insurance companies are the same (i.e., some are rated A+ and others much lower)

The bogleheads website has had a number of threads over the last few years on the pros/cons of them.

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