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Busting Seven Common Myths About Multi-Year Guarantee Annuities

May 20, 2025

Article Summary:

This article clears up common misconceptions about Multi‑Year Guarantee (MYG) Annuities by separating fact from fiction. It explains how MYG Annuities offer guaranteed growth, protection from market ups and downs, tax‑deferred earnings, and flexible access to funds—helping you better understand whether this simple, predictable option could fit into your financial plan.

As a DIY planner, you have a few different choices when it comes to safe options to grow your retirement savings at your disposal—money markets, Certificates of Deposits (CDs), bonds and mutual funds to name a few. However, one potentially misunderstood option is the Multi-Year Guarantee Annuity (MYG) at American National Insurance Company. It’s a simple way to add guaranteed growth to your portfolio, while shielding yourself from market exposure. So, we thought it would be helpful to go through a few of the most common misconceptions and provide answers to help you decide whether or not they are right for your situation.

Myth #1: Multi-Year Guarantee Annuities are only for retirees.

In Reality: An MYG Annuity can be a great option for many types of DIY planners—especially if you need a straightforward, hassle-free way to diversify your portfolio by adding guaranteed returns or are looking for tax-deferred growth as you near retirement. While you will pay taxes upon withdrawal, your money is always protected against market volatility. 

Myth #1: Multi-Year Guarantee Annuities are only for retirees.

In Reality: An MYG Annuity can be a great option for many types of DIY planners—especially if you need a straightforward, hassle-free way to diversify your portfolio by adding guaranteed returns or are looking for tax-deferred growth as you near retirement. While you will pay taxes upon withdrawal, your money is always protected against market volatility. 

Myth #2: Multi-Year Guarantee Annuities have poor returns.

In Reality: MYG Annuities typically have higher returns than money market accounts or certificates of deposit (CDs). Since earnings aren't taxed until withdrawal, your money can compound more quickly over time compared to a taxable asset with the same return. In fact, it would take a higher interest rate on a money market account or CD to achieve an equivalent return from an MYG Annuity. 

Myth #2: Multi-Year Guarantee Annuities have poor returns.

In Reality: MYG Annuities typically have higher returns than money market accounts or certificates of deposit (CDs). Since earnings aren't taxed until withdrawal, your money can compound more quickly over time compared to a taxable asset with the same return. In fact, it would take a higher interest rate on a money market account or CD to achieve an equivalent return from an MYG Annuity. 

Myth #3: I could lose access to my money if I die.

In Reality: Much like buying a life insurance policy, when you open an account with American National Insurance Company, you can name individual beneficiaries, thereby bypassing probate and the expenses that go with it. Should you die, you can pass the full value of your MYG Annuity from American National Insurance Company to your beneficiary free of any surrender charges or additional expenses. 

Myth #3: I could lose access to my money if I die.

In Reality: Much like buying a life insurance policy, when you open an account with American National Insurance Company, you can name individual beneficiaries, thereby bypassing probate and the expenses that go with it. Should you die, you can pass the full value of your MYG Annuity from American National Insurance Company to your beneficiary free of any surrender charges or additional expenses. 

Myth #4: Multi-Year Guarantee Annuities have high fees.

In Reality: The MYG Annuity is a great option if you’re a DIY planner looking for a simple solution with no upfront fees, custodial fees or transaction fees. You only pay surrender charges if you withdraw beyond the annual penalty-free amount—and taxes are deferred until withdrawal.

Myth #4: Multi-Year Guarantee Annuities have high fees.

In Reality: The MYG Annuity is a great option if you’re a DIY planner looking for a simple solution with no upfront fees, custodial fees or transaction fees. You only pay surrender charges if you withdraw beyond the annual penalty-free amount—and taxes are deferred until withdrawal.

Myth #5: Multi-Year Guarantee Annuities are complicated.

In Reality: MYG Annuities from American National Insurance Company are built for simplicity. You do everything online from securely funding your annuity to managing your account to tracking your growth over time. The terms are clear and guaranteed. And you can fund your account with a transfer from a bank account, or a Traditional or Roth IRA. With MYG Annuities, you’re in the driver’s seat. 

Myth #5: Multi-Year Guarantee Annuities are complicated.

In Reality: MYG Annuities from American National Insurance Company are built for simplicity. You do everything online from securely funding your annuity to managing your account to tracking your growth over time. The terms are clear and guaranteed. And you can fund your account with a transfer from a bank account, or a Traditional or Roth IRA. With MYG Annuities, you’re in the driver’s seat. 

Myth #6: Multi-Year Guarantee Annuities are tied to the stock market, so I could lose my money.

In Reality: An MYG Annuity is a fixed deferred annuity that offers principal protection and a guaranteed interest rate for a set period of time. Because it’s shielded from market fluctuations, your money grows securely, unaffected by the stock market. You’ll typically earn a higher fixed interest than you would with a money market or CD for the guarantee period. Best of all, it’s backed by American National Insurance Company, a trusted name in the industry with top ratings for financial strength by AM Best, Fitch and S&P.1

Myth #6: Multi-Year Guarantee Annuities are tied to the stock market, so I could lose my money.

In Reality: An MYG Annuity is a fixed deferred annuity that offers principal protection and a guaranteed interest rate for a set period of time. Because it’s shielded from market fluctuations, your money grows securely, unaffected by the stock market. You’ll typically earn a higher fixed interest than you would with a money market or CD for the guarantee period. Best of all, it’s backed by American National Insurance Company, a trusted name in the industry with top ratings for financial strength by AM Best, Fitch and S&P.1

Myth #7: I can lose access to my money with a Multi-Year Guarantee Annuity.

In Reality: With an MYG Annuity from American National Insurance Company, withdrawal privileges offer the peace of mind of knowing your money is not out of reach. Every contract year, you can withdraw up to 10% of the annuity value free of surrender charges and adjustments. For earnings withdrawn prior to age 59½, a 10% federal tax penalty may apply. In the case of an emergency or unforeseen expenses, you can rest easy knowing that options do exist for additional access to funds during the guarantee period.

 

If you need to access more than the free withdrawal amount, surrender charges may apply and decrease over time based on your contract terms. In short, with an MYG Annuity from American National Insurance Company, you can be confident that your money is always there, and growing, when you need it most.

Myth #7: I can lose access to my money with a Multi-Year Guarantee Annuity.

In Reality: With an MYG Annuity from American National Insurance Company, withdrawal privileges offer the peace of mind of knowing your money is not out of reach. Every contract year, you can withdraw up to 10% of the annuity value free of surrender charges and adjustments. For earnings withdrawn prior to age 59½, a 10% federal tax penalty may apply. In the case of an emergency or unforeseen expenses, you can rest easy knowing that options do exist for additional access to funds during the guarantee period.

 

If you need to access more than the free withdrawal amount, surrender charges may apply and decrease over time based on your contract terms. In short, with an MYG Annuity from American National Insurance Company, you can be confident that your money is always there, and growing, when you need it most.

When the guarantee period you’ve chosen comes to an end, an MYG Annuity from American National Insurance Company gives you flexibility and choice. At the end of your guarantee period, you can either:

  • Withdraw all your money without penalty during a special 30-day window, or
  • Continue the annuity and earn an annual effective interest rate declared annually on the policy anniversary.

These ratings are provided to you so that you can make a comparison of American National Insurance Company to other companies. Ratings reflect independent opinions of an insurance organization's financial capacity to meet its insurance policies and contracts' obligations in accordance with their terms. They are based on each rating agency's quantitative and qualitative evaluation of the company and its management strategy.

A.M. Best Company, independent analysts of the insurance industry since 1899, assigns annual ratings after an extensive analysis using a series of profitability, leverage, and liquidity tests that measure performance in such vital areas as competency of underwriting, control of expenses, adequacy of reserves, soundness of investments, and capital sufficiency.
The Best's Rating Reports reproduced appear under license from A.M. Best and do not constitute, either express or implied, an endorsement of (Licensee)'s products or services. A.M. Best is not responsible for transcription errors made in presenting Best's Rating Reports. Best's Rating Reports are copyright © A.M. Best Company and may not be reproduced or distributed without the express written permission of A.M. Best Company. Best's Ratings are under continuous review and subject to change and/or affirmation. For the latest Best's Credit Rating, access www.ambest.com. A.M. Best's active company rating scale ranges from A++ (Superior) to D (poor).

Please see the Fitch Ratings website for more information on credit rating categories.

Standard & Poor's Financial Services LLC, provides independent financial information, analytical services, and credit ratings to the world's financial markets. For more information on Standard & Poor's rating of American National Insurance Company and related operating companies, view the ratings above. Standard & Poor's active company rating scale ranges from AAA (Extremely Strong) to CC (Extremely Weak). Plus (+) or minus (–) modifiers show the relative standing within the categories from AA to CCC.

Policy Form Series MYG24; (Forms may vary by state). Withdrawals may be subject to federal/state income tax and, if taken prior to age 59½, an additional 10% IRS penalty may apply. Neither the Company nor its agents and representatives can provide tax, legal, or accounting advice. American National Insurance Company, headquartered in Galveston, Texas, is licensed to conduct business in all states except New York. Each company has financial responsibility only for the products and services it issues. Not a deposit. Not FDIC insured. May lose value. Not available in New York.

At the end of your guarantee period, you can either withdraw all your money without penalty during a special 30-day window or continue the annuity and earn an annual effective interest rate declared annually on the policy anniversary.

The Interest Rate Guarantee Periods are subject to availability.

Information herein is not intended to be legal or tax advice. You should consult with your own attorney and tax advisor for your specific circumstances. Current U.S. tax law provides that earnings from an annuity are taxable only upon withdrawal as ordinary income. Any withdrawals in excess of the surrender-free amount are subject to surrender charges or market value adjustments.

Penalty-free withdrawals allow up to 10% of the annuity value at the beginning of the year to be withdrawn annually, free of surrender charges. Any withdrawals, including interest-only withdrawals, will reduce the amount of interest credited to your contract. Withdrawals of earnings are subject to income tax. A 10% IRS penalty may be imposed for withdrawals before age 59½.

Surrender charges may apply if withdrawals exceed the annual penalty-free withdrawal limit. Waivers for Confinement, Terminal Illness, and Disability may allow access to money without any surrender charges, any applicable market value adjustments, or excess interest deductions. Terminal and Confinement Waivers are not available in California.