You've Worked Hard to Build Your Savings. Now Plan for the Life Ahead.
Retirement isn't just about how much you've accumulated. It's about how your savings can support the life you want to live.
Explore annuity solutions that may offer tax-deferred accumulation, contractual guarantees, and retirement income options.
Your Retirement Deserves More Than Guesswork.
During your working years, the focus is often on earning, saving, and accumulating.
Retirement brings a different set of questions.
How much income will you need? How will you manage market uncertainty? What happens if you live longer than you expected?
Annuities are insurance contracts that may help address certain accumulation and income objectives, depending on the product.
Cedar Shield Insurance helps you explore available annuity options and understand the important trade-offs before making a decision.
Different Goals. Different Financial Tools.
Annuities may provide certain benefits depending on the contract selected. Not every feature is available in every annuity.
Tax-Deferred Growth
Earnings generally grow without annual income taxation until withdrawn, subject to applicable tax rules.
Contractual Guarantees
Certain fixed annuities provide guaranteed interest or other benefits, backed by the issuing insurer.
Income Options
Some contracts offer income arrangements, including options designed to continue for life.
Accumulation Strategies
Different annuity designs offer different methods of crediting interest.
Beneficiary Options
Certain contracts provide death benefit provisions or beneficiary payment options.
Retirement Planning
Annuities may complement other retirement resources when suitable for your needs.
Three Types of Annuity Strategies Worth Understanding.
These are common categories of fixed annuity products. Each serves different objectives and carries different contractual limitations.
Traditional Fixed Annuities
Fixed annuities generally credit interest according to contract terms established by the insurer.
- Contractual interest provisions
- Tax-deferred accumulation
- Potential income options
- Withdrawal restrictions may apply
Multi-Year Guaranteed Annuities (MYGAs)
MYGAs generally guarantee a stated interest rate for a specified contract period.
- Defined interest guarantee period
- Tax-deferred earnings
- Contractual withdrawal provisions
- Insurer claims-paying risk
Fixed Indexed Annuities (FIAs)
FIAs credit interest according to formulas linked to an external index, subject to contract provisions.
- Index-linked interest crediting
- Caps, spreads, or participation rates
- Contractual downside protection
- Potential riders and associated costs
Fixed indexed annuities are not direct investments in the stock market or underlying index. Index-linked interest may be zero in some periods. Contractual guarantees, limitations, and charges vary.
Bank CDs and MYGAs: What's the Difference?
Both may offer predictable interest arrangements, but they are fundamentally different financial products with different protections, liquidity provisions, and tax treatment.
| Feature | Bank Certificate of Deposit | MYGA |
|---|---|---|
| Issued By | Bank or credit union | Life insurance company |
| Interest | Generally fixed for the CD term | Contractually guaranteed for the stated period |
| Federal Deposit Insurance | Eligible bank deposits may qualify for FDIC protection within applicable limits. Credit union coverage may be provided by NCUA. | Not FDIC or NCUA insured. Guarantees depend on the insurer's claims-paying ability. |
| Tax Treatment | Interest generally taxable annually in a nonqualified account, even if not withdrawn. | Earnings generally tax-deferred until distributed. |
| Early Withdrawals | Early withdrawal penalties may apply. | Surrender charges, market value adjustments, and tax consequences may apply. |
| Retirement Income | No insurance-based lifetime income guarantee. | Certain annuity contracts offer income options under specified terms. |
A MYGA is not a bank deposit and is not federally insured. State guaranty association protections, where applicable, are subject to statutory limits and are not a substitute for evaluating insurer financial strength. Tax consequences depend on individual circumstances.
Why the Timing of Taxes Matters.
In a nonqualified annuity, earnings generally accumulate without annual income taxation until distributed.
That can affect how much remains in the contract to earn additional interest. However, tax deferral does not mean tax-free income, and the benefit depends on rates, timing, tax brackets, fees, and withdrawal rules.
Hypothetical single premium for illustration.
Hypothetical fixed rate, not a current product quote.
Before withdrawals and taxes, assuming annual compounding and no contract charges.
Hypothetical calculation: $100,000 × (1.04)^5 = approximately $121,665. Actual contract values depend on the insurer, credited interest, charges, and contract provisions. This example does not demonstrate a tax advantage over a CD on an after-tax basis.
A Retirement Conversation Built Around Your Goals.
Understand Your Priorities
Discuss your retirement timeline, income needs, available assets, liquidity requirements, and risk preferences.
Review Available Options
Explore relevant annuity products, contractual guarantees, surrender provisions, fees, and income features.
Make an Informed Decision
Evaluate whether an annuity fits your circumstances and review the application process if you decide to proceed.
Understand the Details Before You Decide.
Are annuities safe?
Fixed annuities can offer certain contractual guarantees, but they are not risk-free. Guarantees depend on the issuing insurer's financial strength and claims-paying ability. Liquidity, inflation, and other risks should also be considered.
Are annuities FDIC insured?
No. Annuities are insurance contracts, not federally insured bank deposits. Any applicable state guaranty association protection is subject to statutory requirements and limits.
Can I withdraw money from an annuity?
Withdrawal rights depend on the contract. Some annuities offer limited penalty-free withdrawals, while larger or early distributions may trigger surrender charges, adjustments, and taxes.
Is there a tax penalty before age 59½?
Taxable annuity distributions before age 59½ may be subject to a 10% additional federal tax, unless an exception applies. This can apply to nonqualified annuities as well as qualified annuities.
Are MYGAs better than CDs?
Neither is universally better. The comparison depends on available rates, liquidity needs, insurance company risk, deposit insurance, tax treatment, and the intended holding period.
Do fixed indexed annuities invest directly in stocks?
No. Fixed indexed annuities use interest-crediting formulas linked to an external index. They do not provide direct ownership of the index or its underlying stocks.
Can an annuity provide lifetime income?
Certain annuity contracts offer lifetime income options through annuitization or contractual income riders. Availability, fees, guarantees, and payout terms vary by product.
Your Retirement Is Too Important to Leave to Assumptions.
Explore whether an annuity may have a place in your retirement strategy. Start with a conversation about your goals, time horizon, and financial priorities.
Annuities are long-term insurance contracts. Guarantees are subject to the issuing insurer's claims-paying ability. Annuities are not FDIC or NCUA insured and are not bank deposits. Withdrawals may be subject to surrender charges, market value adjustments, ordinary income taxes, and an additional federal tax for certain distributions before age 59½. Fixed indexed annuities are not direct investments in securities or indices. Product availability and features vary by insurer and state.