What Will Be Covered in this Annuity Review?In this review, we will be covering the following details on the Farm Bureau Select IV New Money 4 MYGA annuity:
- Product type
- Current rates
- Realistic long-term return expectations
- How it is used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.
Purchasing any type of financial vehicle is a big decision – but this can particularly be the case with annuities. One reason for this is because an annuity can offer you a lifetime stream of income in retirement. But if you end up choosing one that really doesn’t fit your particular needs, then it could have a negative impact on your retirement lifestyle…and the way you live for the remainder of your life. These products can also oftentimes require a large chunk of your retirement savings. And, because most annuities have surrender penalties for withdrawing your funds – some for more than ten years – it can cost you dearly if you purchase an annuity and then soon afterward determine that a different product would be better. Annuities can be somewhat confusing to understand – even for well-educated consumers (as well as for some financial and insurance advisors). As “new and improved” annuities hit the marketplace, there can be a plethora of “small print” that comes along with these vehicles, sort of like an owner’s manual. But have you ever really sat down and read the owner’s manual for any product, word-for-word, before you purchased it? This is where we come in!
Annuity and Retirement Income Planning Information That You Can Actually TrustIf this is your first visit to our website, then please allow us to personally welcome you here to Annuity Gator. We are a team of experienced annuity professionals who focus on offering comprehensive and unbiased annuity reviews online. We’ve been at this for quite some time now – and far longer than our competitors. Because of this, we have come to be known as a highly trusted source of annuity information. Over the past several years or so, though, many “copycat” websites have started to spring up, mimicking what we do. While that can be somewhat confusing for consumers, we take it as “imitation being the highest form of flattery.” As you’ve spent time on the Internet researching annuity information, you may very well have come across some highly conflicting details about these products. But this really isn’t all that surprising. There are lots and lots of different annuities out there today, and just about anyone and everyone has thoughts about whether they are good, bad, or otherwise. The reality is, though, none of that matters – as long as you know whether or not a particular annuity is or isn’t right for YOU. If you want to know more about the Farm Bureau Select IV New Money 4 MYGA annuity, then you are certainly in the right place. In fact, dare we say that our website is the only place that you’ll be able to secure all of the details you need, which includes the good, the bad, and yes even the ugly. This, however, is the only way to make a good, solid decision about whether or not to purchase it. In order to be perfectly clear here, we want to state for the record that we at Annuity Gator feel that annuities can be good products for some people – as long as they fit in with your overall financial needs and goals. So, if you’re ready to start the review, let’s get started!
Farm Bureau Select IV New Money 4 MYGA Annuity at a Glance
|Product Name||Select IV New Money 4 MYGA|
|Type of Product||Multi-Year Guarantee (MYGA) / Fixed Annuity|
|S&P Rating||A (Excellent)|
|Phone Number||(800) 247-4170|
Opening Thoughts on the Farm Bureau Select IV MYGA AnnuityFarm Bureau Financial Services was initially founded back in 1939 when the state Farm Bureau founded Iowa Farm Mutual Insurance Company with the purpose of meeting the unique liability insurance needs of farmers. Over the years, the company grew – and expanded its product line – to include life insurance and retirement annuities. Today, the company has roughly 4,000 agents who actively market the company’s insurance and annuities (both fixed and fixed indexed). Based on the financials of all three subsidiaries of the Farm Bureau Financial Companies – which include Farm Bureau Life Insurance Company, Farm Bureau Property and Casualty Company, and Western Agricultural Insurance Company – A.M. Best has provided a rating of A (Excellent). The need for fixed / MYGA annuities – which are always backed by life insurance carriers – has been steadily growing over the past few years as more and more of today’s workers are retiring without having the stability of a traditional “defined benefit” pension for future income. By choosing the lifetime income stream on such an annuity, you can essentially “replace” a defined benefit pension plan. If you have a “defined contribution” retirement plan, such as a 401(K), then upon retirement, you will need to have an idea of what you want to do with the money you’ve saved in it – as well as a way to convert those dollars over into a stable and reliable income stream (ideally that will last for the remainder of your life – regardless of how long that may be). One possibility would be a fixed or MYGA annuity. This is because these financial vehicles can offer you a set return and safety of your principal (regardless of what happens in the market), along with a lifetime income that you can count on going forward.
Before we get into the gritty details, here are some necessary legal disclosures…This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Farm Bureau has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see out perspective when breaking down the positives and the negatives of this particular annuity. Before purchasing any type of insurance and/or investment product, it is important that you do your own due diligence, and that you consult a properly licensed professional if you should have any specific questions that relate to your individual situation. All of the names, marks, and materials that were used for this annuity review are the property of their respective owners. For more information on how to compare annuities in order to determine which one may be the best for you and your financial circumstances, click here to obtain our free annuity report.
How Farm Bureau Describes the Select IV New Money 4 MYGA AnnuityFarm Bureau describes the New Money 4 annuity as a single premium fixed annuity product that offers a fixed interest rate (which gets higher, the more money that you initially deposit). In fact currently (November 12, 2017), Farm Bureau is stating on its website it is offering a great rate on the New Money 4 annuity. In this case, Farm Bureau is offering 2.00% interest guaranteed for four years – which, according to FDIC.gov, is more than twice the average 5-year bank CD. The New Money 4 also offers a guaranteed rate of 1.00%. As with other annuities, the funds that are inside of the annuity are allowed to grow and compound on a tax-deferred basis, which can allow your money to increase exponentially over time. And, as an MYGA (Multi-Year Guarantee) annuity, this annuity will lock in your interest rate for, in this instance, four full years. This is the case, regardless of what happens in the market, as well as with interest rates overall.
How an Insurance or Financial Advisor Might “Pitch” this AnnuityIf you are approaching retirement, then you may be torn between going with financial vehicles that have more risk in order to increase your opportunity for growth, and going with something “safe” so that you don’t lose any of your hard-earned retirement funds. Because many pre-retirees today are concerned about not losing what they’ve already saved, having certain guarantees can be comforting – so if you have been presented this annuity by an insurance or financial advisor, it is likely that they keyed in on the safety features of this product, along with the ability to earn a higher return if or when rates rise in the near future. So, in many ways, this annuity can allow you to potentially increase the returns on your “safe money.” But there are some tradeoffs that you need to be mindful of. For example, even though you can earn more than the guaranteed rate on this annuity, the reality is that you still may not be able to beat, or even meet, the rate of inflation. With the Select IV New Money 4 MYGA annuity from Farm Bureau, you would be locked into your initial rate for four full years. Therefore, if another, better opportunity came along, you would either have to bypass it or alternatively, take the hit on the surrender charge in order to get all of your money out.
What About the Fees on the Select IV New Money 4 MYGA from Farm BureauEven though fixed / MYGA annuities can offer some nice benefits – primarily by way of their guarantees – the reality is that annuities can also oftentimes be riddled with fees. This is especially true if you want to take out most or all of your money within the first several years. In the case of Multi-Year Guarantee products, there is typically a surrender charge that matches up with the initial guarantee period. So, with the Select IV New Money 4 MYGA, if you wanted to take more than 10% of the contract value out, then you would incur a surrender charge if you did so during the first four years. On top of that, if you make such a withdrawal, and you are under the age of 59 1/2, then you could also find yourself paying an additional penalty of 10% to the IRS as an “early withdrawal” fee. So, you really need to consider this (or any) annuity as a long-term financial endeavor and know that the money you put into it could be locked up for quite some time before you can use it.
The Annuity Gator’s End Take on the Farm Bureau Select IV New Money 4 Multi-Year Guarantee AnnuityWhere this annuity works best: Just like all products, there can be some pros and cons, meaning that the item or service may work well for some, and not-so-well for others. If you’re still considering the Farm Bureau Select IV New Money 4 annuity, then it could work well for you if you are seeking the following benefits:
- Guaranteed growth (at least for the first 4 years)
- Protection of principal
- Lifetime income in retirement
- You want the opportunity to earn an even higher rate of return in order to keep better pace with future inflation
- You want to access more than just 10% of the contract’s value during the surrender period
- You do not plan to use the lifetime income feature