Protect Your Retirement: How MYGAs Can Shield You from Market Volatility

Written by Hersh Stern Updated September 23, 2025

Sometimes the stock market seems divorced from reality; inflationary pressures are still stinging and threatening to rise again while some experts say the economy is cooling. On top of that, in their 2025 mid-year report, J.P. Morgan still puts the chance of a recession at 40%.

If this gives you the jitters about having your retirement money invested in the markets, you may be looking for safe havens from market volatility and economic downturns. That’s where an annuity like a Multi-Year Guarantee Annuity (or MYGA) can help you.

But MYGAs can do more than just shield you against market downturns. A MYGA can also:

• Be a safe haven from wild market swings and downturns
• Grow your money at a competitive guaranteed interest rate
• Offer tax deferred growth in addition to traditional retirement accounts
• Provide security during economic uncertainty

How Do Fixed-Rate Annuities Avoid Market Downturns?

You are probably wondering how an annuity can protect you from market volatility, especially market downturns. It’s first important to note this: not all annuities protect you from market fluctuations. In fact, there are several types of annuities that perform based on the stock market or market indices such as Fixed Index Annuities and Variables Annuities.

The type of growth-based annuity that protects you from the stock market is called a Multi-Year Guarantee Annuity or MYGA. A MYGA grows your money at a fixed rate for a set number of years. This rate is set at the time you purchase your annuity and is guaranteed not to change for the whole term.

So if you buy a MYGA that guarantees your money grows at 5% for five years, your money will grow at exactly 5% for five years. That’s why a MYGA is also called a fixed-rate annuity. There is no guesswork involved, and the insurance company is providing guarantees while assuming market risks.

How do insurance companies guarantee these rates?

Many people want to know how an insurance company can guarantee a MYGA rate, even if the stock market tanks. The answer to this is actually pretty straightforward.

Insurance companies tend to have conservative investment profiles. They invest heavily in products that offer guaranteed rates of returns like bonds. In 2024, industry-wide insurance companies invested about 60% of their holdings in bonds on average.

Because a large part of their investments also have guaranteed returns, the insurance companies can offer guaranteed products based on the rates they are getting in their own investments, such as those bonds.

Is a MYGA a safe investment?

Even the best MYGA is only as safe as the insurance company that is providing it. It is essentially a contractual agreement between you and an insurance company. While we enter into these types of agreements all the time (your savings account is an agreement between you and a bank), the safety of MYGAs is different from products offered by banks. MYGAs are not FDIC insured, like many bank products are.

So how safe is your insurance company then? If you are a financial pro, you could pour through their statements to try to identify their financial stability. But for the rest of us, the easiest and most common way to judge an insurance company’s financial stability is through their credit rating.

Rating agencies like A.M. Best, Moody’s, and Standard & Poor’s do the analytical work for us and rate insurance companies’ financial stability. Check out our insurance companies ratings page for more information.

In addition to this, many insurance companies participate in State Guaranty Associations which protect annuity buyers. These protections vary by state, however, so make sure you understand what is and isn’t protected by your Guaranty Association and that the insurer you are interested in is a participating member.

What Are The Key Take-Aways To Know About Using MYGAs as a Financial Safe Haven?

If you are considering buying a MYGA as a financial safe haven, keep the following in mind:

• MYGAs are not affected by stock market volatility, your interest rate is set when you buy it and won’t change during the term
• The security of a MYGA is based on the security of the insurance company issuing it, so choose your company carefully
• Other types of annuities may still expose you to market downturns, so make sure you understand what you are buying!
• MYGAS offer competitive rates, often better than CDs
• There are other benefits too, such as tax-deferral and beneficiary designations

If you are looking for financial stability and peace of mind, consider adding a MYGA to your portfolio. Our annuity experts at (866) 866-1999 can help you find the best Multi-Year Guarantee Annuity rates from top-rated insurers.

References:

• Hansen, Sarah. “Is the US Economy Headed for a Recession?” Morningstar. Published September 12, 2025.
• Knueven, Liz. “A.M. Best ratings evaluate insurance companies’ financial strength — here’s what you need to know about these scores”, CNBC, Published March 29, 2024.
• Wong, Michele. “Capital Markets Special Report” National Association of Insurance Commissioners. Published May 2025. Retrieved September 1, 2025 from
• “Mid-year market outlook 2025: A broad spectrum of potential outcomes”, J.P. Morgan. Published July 01, 2025.