MYGA vs FIA Calculator

MYGA vs FIA: the one-minute difference

A MYGA (multi-year guaranteed annuity) is the annuity version of a CD: you hand over a premium, the carrier guarantees a fixed rate for a fixed term, and at the end of the term you know exactly what the balance will be. Nothing about the market changes it. A fixed indexed annuity (FIA) is the same principal protection with a different engine — the carrier credits interest based on an index such as the S&P 500, capped at a maximum annual credit and floored at 0% so a bad index year never reduces your balance.

So the real question is not “which is safer” — both protect principal — but “do I want a number I can count on, or a range with a chance at more?” That is what this calculator answers, using the actual carrier rates and caps available on Annuital today.

How this calculator compares guarantees to potential returns

The guaranteed side is straightforward: we quote every MYGA on the shelf for your state and premium band, take the highest rate available for your holding period, and compound it.

The potential side runs the indexed product's actual cap and floor across every rolling holding-period window in S&P 500 annual price returns from 1988 through 2024 — including 2000–2002, 2008, and 2022. We then plot the worst, median, and best window against the guaranteed line, and count how often the indexed strategy beat the guarantee. Dividends are excluded, which understates the index and keeps the comparison conservative.

What the record shows for your selection

For a $100,000 premium in MA held 5 years, the best guaranteed rate on the shelf today is 5.80% (MYAnnuity 5X, Nassau Life and Annuity Company), which projects to $132,565 — a guaranteed gain of $32,565. Over the same period the indexed product with a 9% cap and 0% floor finished between $118,799 and $153,862 across the 33 rolling S&P 500 windows since 1988, with a median result of $134,074. The indexed strategy came out ahead of the guarantee in 19 of those 33 windows (58%).

How the cap and the 0% floor actually work

A cap is a ceiling, not an average. If the index returns 14% in a year and your cap is 9%, you are credited 9%. If it returns 4%, you are credited 4%. If it returns −18%, your floor holds the credit at 0% — your balance does not fall. Over a holding period your average annual credit ends up somewhere below the index's average return, which is exactly why comparing the FIA's worst, median and best windows to a fixed rate is more honest than comparing a cap to a rate.

The floor is what makes the comparison interesting: an FIA never has a negative year, so it benefits from the automatic recovery in the years after a crash, while also starting each recovery year from a protected balance.

Which annuity fits which saver

• You have a dated expense — a bridge to Social Security, a mortgage payoff, or a known five-year window. A MYGA matches the date and the amount exactly.
• You are replacing a CD — the MYGA is the closest comparison, usually at a higher rate and with tax deferral.
• You want upside without market risk — an FIA keeps the 0% floor but gives you participation in index years that a fixed rate cannot.
• You are building income — ladder MYGAs to mature when you need cash, and consider an FIA for the sleeve you will not touch for a decade.
• You need certainty in writing — if a range of outcomes keeps you up at night, the guaranteed rate is worth more than the potential upside.

Taxes, liquidity and surrender charges

Both products grow tax-deferred, so neither generates a 1099 while the money stays inside the contract. You pay ordinary income tax when you withdraw — not the lower capital gains rate — and withdrawals before age 59½ generally carry a 10% federal penalty. Both typically allow about 10% of the account value per year penalty-free, and both have declining surrender charges if you take more than that before the term ends. Because these are insurance contracts, a Section 1035 exchange can move money between them or from another annuity without triggering tax.

Important disclosures: all figures on this page are projections for illustration only and are not guarantees of future performance. Indexed results are modeled using S&P 500 price returns from 1988 through 2024 (dividends excluded) with annual point-to-point crediting, the product's current cap, and a 0% floor; actual credits depend on the carrier's declared cap, participation rate and crediting method in effect each year, which can change. Guaranteed rates are the carriers' current declared rates for the state, premium and term shown and are subject to change without notice. Guarantees are backed solely by the claims-paying ability of the issuing insurance company. Early withdrawals may be subject to surrender charges, market value adjustments, and a 10% federal tax penalty before age 59½. Annuital is a DBA of Small Business Insurance Agency, Inc., a Massachusetts licensed insurance agency. Products not available in CA or NY. This is educational information, not financial or tax advice — consult a qualified professional about your situation.