The risk isn't a bad market.
It's a bad market when the IRS is forcing you to sell.

Every retiree with a traditional IRA faces a single, brutal mechanical risk: at age 73 the IRS forces you to start pulling money out — every year, no exceptions, even in years when the market just gave up 30%. Those are the years that statistically destroy retirements. Not the bad markets themselves. The bad markets when you have no choice but to sell at the bottom to pay your RMD.

This article walks through the historical evidence (S&P 500, 2000–2024), three actual retiree scenarios using real returns, why MYGAs at today's rates are unusually well-suited to fix this problem, why FIAs are not, and which carriers we've vetted to confirm they honor the aggregation rule that makes the strategy work.

OK so how does the MYGA actually solve this? (The "two-bucket" picture)

This is the visual that flips people from "wait, is this a scam?" to "oh, that's actually obvious." Two scenarios, side-by-side: a bad market year and a good market year. The MYGA is the safe bucket. The stocks are the growth bucket. The strategy is simply: pull your RMD from the bucket that hurts least.

1.Will you hit a down year during retirement?

Yes. Almost certainly.

Historical S&P 500 base rate: roughly 25% of all years are negative. Across a 15-year retirement, the probability of hitting at least one down year compounds to ~99%. Across 25 years, it's 99.9%. In other words: planning your RMD sourcing around the assumption that markets cooperate is planning around a 1% outcome.

How big are these down years typically?

This is the part that matters for the strategy. Not every down year is a 2008 disaster. But corrections big enough to force ugly RMD timing are far more common than retirees expect:

Last 25 years specifically (2000–2024):

• 6 of 25 years were negative (24%) — right at the historical base rate. The years: 2000, 2001, 2002, 2008, 2018, 2022.
• 4 of those 6 lost more than 10% — the years that actually hurt (2001 at -11.9%, 2002 at -22.1%, 2008 at -37.0%, 2022 at -18.1%)
• 2 of those 4 lost more than 20% — bear-market territory (2002, 2008)
• 1 of those 2 lost more than 35% (2008 at -37.0%). Note: 2000+2001+2002 stacked into a cumulative ~-38% drop across three years — that's the "sequence" that destroyed retirees who started in 2000, not any single year by itself.

Bottom line: across a 15-year retirement, you should plan around 2-4 sharp drawdowns as the base case. Pretending otherwise is the planning error.

Here's the actual sequence over the last 25 years — the chart that should be on every retiree's wall:

2.The real example: an age-73 retiree starting in 2000

Let's stop hypothesizing and use actual S&P returns. Imagine you turned 73 on January 1, 2000 with exactly $1 million in your traditional IRA. The IRS forces you to start RMDs. Here's what actually happened, year by year, with and without a small MYGA buffer.

The honest punchline: the with-MYGA scenario ended at ~$30K more in remaining assets at age 97 — AND took out ~$90K more in cumulative RMDs over the 25 years (because the larger balance during recovery years generated larger RMDs). Total wealth delta: ~$120K on a $1M starting IRA. Roughly 12% better outcome.

What this actually proves: the strategy works — but it's not a magic 10x. It's a meaningful, defensible 10-15% improvement in retirement wealth over the worst sequence in modern market history, with the MYGA preserving the most value in years 2002, 2008, and 2022 (the actual bears). In a more cooperative sequence (like 2014-2024), the gap would be much smaller. The honest framing: this is insurance, not a get-rich strategy.

What about a retiree starting today?

We can't know future returns. But we know the historical base rate: ~25% of years are negative, ~16% drop more than 10%. Across a 15-25 year retirement starting today, you should plan for 3-5 down years and 1-2 sharp bears as the base case. The MYGA strategy gives you the same kind of protection going forward that it gave the 2000 retiree above — sized to whatever your view of the next 3-5 years looks like (see Section 4 for the sizing framework).

The same logic in a 3-5 year window (the tactical version)

Important: nobody holds a MYGA for 25 years. The strategy is tactical — you buy a 3-year or 5-year MYGA when you sense market risk, drain it for RMDs over the term, then decide whether to do it again. Long-term simulations with continuous MYGA holds aren't how this works in practice. So instead of pretending you'd hold one forever, let's look at one specific 5-year window where this strategy would have been worth real money.

Hypothetical retiree: $1M IRA, retired Jan 2000, $40K annual RMD

This was the worst sequence in modern history to start a retirement. Here's what actually happened over the first 5 years (real S&P returns):

• 2000: S&P -9.1% — pull $40K RMD
• 2001: S&P -11.9% — pull $40K RMD (now 3rd time pulling from a down market)
• 2002: S&P -22.1% — pull $40K RMD (cumulative damage now ~-38% on the portfolio)
• 2003: S&P +28.7% — finally a recovery year
• 2004: S&P +10.9% — recovery continues

Two scenarios, same starting $1M:

Scenario A — no MYGA (100% market): $40K RMDs come out of the equity portfolio every year. Forced to sell stocks at -9%, then -12%, then -22%. By end of 2002, the portfolio is down to about $525K. Even with the 2003-2004 recovery, you end year 5 at roughly $665K. That's a $335K drawdown on a starting $1M.

Scenario B — bought a $200K, 5-year MYGA in Jan 2000: $200K MYGA at 5.5% guaranteed plus $800K in equities. In 2000, 2001, and 2002 (all negative years) you pull the $40K RMD from the MYGA — stocks stay invested. In 2003 and 2004 (positive years) you pull the RMD from the market — MYGA keeps compounding. End of year 5: MYGA ≈ $120K, market ≈ $628K, total ≈ $748K.

Gap at year 5: ~$83K in Scenario B's favor. That's what the strategy bought you in a single 5-year window. The retiree who used the tactical MYGA preserved 12% more of their wealth — and never had to watch their equity sleeve get cut by a third while they were forced to sell during the bear. Across a 15-year retirement with multiple cycles like this, the cumulative protection compounds further.

The chart below shows the actual year-by-year mechanics of the 3-year and 5-year tactical MYGA — how the balance drains, what the interest does, and when the RMDs come out:

4.How much MYGA is "right"?

This matters. Too little MYGA, and the buffer runs dry in a multi-year downturn. Too much, and you give up real equity upside in good years. The sweet spot for most retirees is 10–20% of total IRA balance.

Practical rule of thumb: size the MYGA to cover 2-4 years of RMDs. That gives you enough runway to ride through the typical bear-market-to-recovery cycle without ever touching the equity bucket during the drawdown.

5.This is a tactical 3- or 5-year insurance policy — not a long-term holding

One thing to be clear on up front: the MYGA RMD valve is not something you buy and hold forever. It's a short-term insurance policy. You buy a 3-year or 5-year contract when you sense market risk (or just want guaranteed sequence protection for that window), drain it down over the term as you take RMDs, and then decide whether to do it again or step out entirely.

Why structure it this way?

• You don't pay for protection you don't need. If after 3 years the market has been calm and your sequence-risk concern feels lower, you don't roll into another MYGA. You walk away.
• You match the contract to the risk window. Late-cycle, elevated valuations, recession watch — these are exactly when locking 3 years of guaranteed yield + RMD protection makes sense. Buy when the worry is real.
• You stay flexible. Markets, rates, and your own situation change every few years. A 3- or 5-year contract gives you a clean re-evaluation window without committing your wealth to a 20-year annuity decision.
• You re-shop rates each cycle. Today's 5.85% might be tomorrow's 4.5% — or vice versa. Each term ending is a chance to hunt for the best rate available at that time. See the next section.

The minimalist version: "Insurance for ONE bad year" (smallest possible bet)

The simplest, cheapest version of this strategy: buy a 3-year MYGA equal to about 4-5% of your total IRA — roughly one year's worth of forced withdrawals at current ages. Not a precise dollar figure (RMDs change every year), just a "one bad year's worth of liquidity" rule of thumb.

• $500K IRA → MYGA around $20-25K
• $1M IRA → MYGA around $40-50K
• $2M IRA → MYGA around $80-100K
• $5M IRA → MYGA around $200-250K

The logic: across any 3-year window, there's about a 58% chance at least one of those years is a market down year (using the ~25% historical base rate). You're betting that at least one of those 3 years will be a bear, and you want to be insured for that one year. When the bad year hits, you drain the MYGA balance to satisfy that year's RMD — penalty-free under the RMD-friendly provision. Your equity portfolio doesn't get touched in the down year.

How the 3 years play out on a $1M IRA with a ~$45K MYGA at 5.85% (bad year hits in Year 1):

• Year 0: Buy the MYGA. Stocks unchanged.
• Year 1 (BAD market): MYGA balance grows to $47.6K with interest. Your RMD this year (computed on the prior year's balance) is roughly $38K. Pull it from the MYGA. Stocks rode through the crash untouched.
• Year 2: ~$10K remains in MYGA, earning 5.85%. RMD comes from stocks (good recovery year).
• Year 3: MYGA matures. Take the small residual cash. Decide whether to do it again.

If no bad year hits in 3 years (~42% chance): you let the MYGA mature at 17.5% growth over the term (5.85% compounded for 3 years). You haven't lost anything — you earned guaranteed yield on a small slice while your stocks did whatever they did. Then you decide whether to roll it.

What's a "year's worth of RMD" — by age

Your RMD as a percent of your IRA grows every year because the IRS divisor shrinks as you age. Use this to size your MYGA — multiply your IRA balance × your age's percentage:

Instead of a fake $2M example, here's what your forced RMDs would have actually looked like if you turned 73 on Jan 1, 2000 with a $1M IRA and held 100% in S&P 500. Each year the IRS divisor shrinks (so RMD % grows), AND the balance moves with the market — the dollar amount jumps around because of both forces:

Look at the RMD column. It went from $37K → $34K → $29K → $22K → $29K → $32K → $34K → $39K → $41K → $25K → $31K → $36K → $37K. Not a steady ramp. It dipped HARD in years like 2003 ($22K) because the prior-year balance was wrecked. Those small-RMD years aren't "good" — they're the compressed-dollar trap we showed in Section 1. The MYGA strategy is exactly what handles them.

Size YOUR MYGA based on YOUR view of the next 3 years

This is the part that makes the strategy personal. You don't have to predict the market. You just have to answer one question: How many bad years do you think are likely in the next 3?

Here's the historical base rate (using a 25% per-year down rate, like the long-run S&P):

The point: you reverse-engineer the size from your own conviction about the next 3-year market window. There's no "right" answer — the math works at every size. Pick the bet you actually believe.

Everything below is the deeper substance — why MYGAs beat bonds and conservative stocks, why rates are at multi-decade highs right now, the specific contract language you need from carriers, and the step-by-step playbook for actually buying one. Read it if you want to be the smartest person in the room when you decide. Skip it if you're already sold.

6.What happens when the term ends — and how to "shop" your money to the next carrier tax-free

At the maturity date of your MYGA, the surrender-charge period ends. You have full liquidity on whatever balance remains, and three real options:

Option A — Take the cash

The contract pays you out. If the MYGA is inside an IRA, the proceeds stay inside your IRA (no taxable event — it just becomes cash within the IRA, ready to be redeployed however you want). If it's a non-qualified MYGA outside an IRA, the gains become taxable as ordinary income that year. For our RMD strategy, the MYGA is almost always inside the IRA, so cash-out has no tax friction.

Option B — Renew with the same carrier at their new rate

The carrier will offer you a renewal rate at maturity. This is usually lower than your original rate (they'd rather not pay you the original premium rate forever). You can accept the renewal, but it's almost never the best deal available — the carrier knows it's easier for you to stay than to move. Convenient, but rarely competitive.

Option C — Shop the market and exchange (the smart play)

This is what most retirees should default to. At maturity, you exchange your matured MYGA into a NEW MYGA at whichever carrier has the best rate at that time — with zero tax friction.

• For IRA-held MYGAs (the standard for RMD strategy): you do an IRA-to-IRA transfer from the current carrier to the new carrier. The IRS treats this as an internal transfer between qualified accounts — no taxable event, no penalty, full balance moves over.
• For non-qualified MYGAs (held outside an IRA): you use a 1035 exchange (Section 1035 of the Internal Revenue Code). It allows you to exchange one annuity for another tax-free, preserving the cost basis and avoiding recognition of gains.
• Both mechanisms achieve the same thing: move your money carrier-to-carrier at maturity to chase the best available rate, without any tax cost or surrender penalty.

The clean re-evaluation moment

At each term end, you have three real decisions to make, all clean:

1. Do I still feel the sequence-risk concern? If yes → exchange into another MYGA. If no → take the cash inside the IRA and redeploy to equities or bonds.
2. What are current MYGA rates? Shop all the A-rated carriers (we do this for our clients automatically). Pick the highest-rated contract at the best rate.
3. How long should the next term be? Match the new term to your next risk window. 3 years if you want flexibility, 5 if you want to lock in rates longer, 7-10 if you're confident in current rates and want maximum guarantee duration.

7.Why a MYGA, not an "FIA" (the more complicated annuity cousin), for this job?

What's an FIA? A Fixed Indexed Annuity is a different kind of annuity that ties your return to a stock-market index (like the S&P 500) with caps, floors, and participation rates. Sounds appealing — upside without downside, right? In practice it's complex, the caps are often low, and the return is unpredictable. Useful for some retirees in some situations, but the wrong tool for RMD insurance specifically. Here's why:

For RMD insurance specifically, the MYGA wins on every dimension that matters: you need a predictable, guaranteed, known-rate bucket to pull from in down years. FIA returns depend on which years the index delivers — which is exactly the variable you're trying to neutralize.

The honest exception: if MYGA rates were 2.5% (like they were 2018-2021), the FIA's potential upside might be worth the complexity. At today's 5.4-6.0% MYGA rates, that case is hard to make.

"Why not just hold conservative stocks?"

Fair question. Lots of retirees keep a slice of "conservative" or defensive stocks (utilities, consumer staples, dividend payers) as their "safe" allocation. You should probably keep some — they pay dividends, they grow, they're a legit part of a retirement portfolio.

But here's the difference that matters for RMD insurance:

"Contract" is the positive word. It means you know what you're getting. It means somebody is on the hook to deliver. It means no surprises. Every other "safe" asset on a retiree's balance sheet — bonds, dividend stocks, defensive sectors, REITs — is just an expectation. A MYGA is a promise.

The pitch isn't "ditch your conservative stocks for a MYGA" — you should probably keep your dividend payers and your utilities. The pitch is: "for the slice of your portfolio that ABSOLUTELY CANNOT drop because you need it to fund a forced RMD in a down year, use the only retirement vehicle that's contractually guaranteed."

"But can't I just use bonds?" — two birds with one stone

Fair question. Bonds CAN technically satisfy RMDs — anything inside your IRA can. The mechanics are: you sell some bonds, the cash funds the RMD, the rest of the bond portfolio sits there. So yes, bonds work.

But here's why MYGAs at today's rates are two birds with one stone compared to bonds:

• Bond-like yield (and often better): A 5-year MYGA at 5.85% beats most A-rated 5-year corporate bond yields right now, with zero default risk. Bonds you actually buy on the open market = same yield, but you're holding the credit risk of a single issuer.
• No interest-rate price risk on the parked dollars: If rates rise after you buy, your bond's market value drops. A MYGA has no market value to drop — it's a contract, not a tradeable security. You're guaranteed the exact amount when you pull it out, whenever you pull it out.
• Contract-level RMD provisions: Bonds have no special "RMD-friendly" status. They're just an asset you sell at market price (which may be DOWN in a rate-rise year). A MYGA explicitly waives surrender charges for RMD withdrawals — a contractual right bonds don't have.
• No reinvestment-rate decisions: When a bond matures or pays coupons, you have to decide what to do with the proceeds. A MYGA quietly compounds at the locked rate for the whole term.

The summary: MYGAs at 5-6% deliver the yield bonds aim for, with contract guarantees bonds can't match, AND a designated RMD-friendly provision. Bonds work; MYGAs work better for this specific job at today's rates.

8.Why are MYGA rates so high right now?

This is a Federal Reserve story, and understanding it tells you both why to act and roughly how long the window stays open.

The bond-yield backstory

An insurance carrier doesn't pay MYGA holders out of thin air. They take your premium, invest it in their general account — overwhelmingly in investment-grade corporate and government bonds — and pay you a spread off the yield. So the MYGA rate they can credibly offer tracks bond yields, with about 3–9 months of lag.

The path from 2021 to now:

• 2021–early 2022: Fed Funds rate ~0%. 10-year Treasury yields ~1.5%. MYGA rates: 2.0–3.0%. Nobody wanted them.
• 2022–2023: Fed raises rates aggressively to fight inflation. 10-year Treasury yields jump to 4–5%. Investment-grade corporate yields hit 5.5–6.5%. Carriers can now safely back 5%+ MYGA rates.
• 2024–2025: Yields stay elevated even as the Fed signals cuts. MYGA rates hit 5.5–6.0% on 3–5 year terms — the highest in 15+ years.

Why the window probably doesn't last

The Fed is signaling rate cuts. Each 0.25% cut filters through the bond market within a couple months, and MYGA rates follow within 3–9 months. When the 10-year Treasury drops back to 3%, MYGA rates settle back to the high 3s / low 4s, where they sat for most of the last decade.

This isn't a "buy now or miss forever" pitch. It's a real description of how the product is priced. The 5.4–6.0% rates available today are a function of an unusual interest-rate environment, and they will compress as that environment normalizes.

9.Important: what "RMD-friendly" actually means

A common misconception (one we've corrected in our own thinking): "RMD-friendly" does not mean you can liquidate the whole MYGA balance in a bad year. It means the carrier waives surrender charges on withdrawals up to your aggregate IRA RMD amount for that year. That's it.

So if you have a $200K MYGA and your aggregate RMD is $80K, you can pull $80K penalty-free that year. You cannot pull $200K penalty-free just because the market crashed. The "use 80%+ in a bad year" version of the strategy only works when the MYGA balance roughly equals your annual RMD (small contracts) or after the MYGA matures (typically 3–10 years out, when full liquidity returns).

The strategy still works year-by-year because:

• Each year's RMD amount can come from the MYGA penalty-free
• Over multiple years, cumulative RMD withdrawals drain the contract naturally
• At maturity, the remaining balance is fully liquid

The ladder approach for multi-year coverage

If you want the strategy to cover RMDs across many bad years — not just one — build a MYGA ladder:

• Buy a 3-year MYGA, a 5-year MYGA, and a 7-year MYGA (or similar staggered terms)
• Each year, you have at least one contract that's mature (or close to mature) — meaning fully liquid for whatever you need
• The contracts you're not draining keep compounding at their locked rates
• As each contract matures, you can roll it into a new MYGA at whatever rates exist then

A ladder smooths your liquidity across the entire retirement glide path while keeping the RMD-insurance benefit intact.

10.Not all carriers honor this — here's what to ask for

The strategy depends on the contract honoring an RMD waiver that's broad enough to cover whatever amount you call "your RMD" — and on the carrier's financial strength being solid enough that the guarantees actually mean something 5–10 years from now.

Honest note about the word "aggregate." Insurance carriers don't typically write the word "aggregate" into their contracts. They use broader phrases like "any required minimum distribution" or "the RMD." Whether the carrier honors an aggregate-IRA RMD (the full RMD calculated across all your traditional IRAs, taken from this one contract) is more a matter of standard industry practice + IRS rule than of explicit contract language.

How the language usually looks:

• Best in practice: "Any required minimum distribution will not be subject to withdrawal charges, including amounts above the 10% free amount" (Aspida-style language). Broad enough to cover whatever you call "your RMD" — operationally, that includes aggregate.
• Acceptable: "RMD-friendly" / "RMDs are exempt from surrender charge" — standard language across most A-rated carriers. Operationally honors the aggregate amount because the carrier doesn't audit your other IRAs.
• Limiting (rare): "RMD calculated on this contract's accumulation value" — would cap your penalty-free RMD at the contract-only number. This explicit narrowing IS rare but it exists in some smaller carriers' contracts. Watch for it.
• Worst: No mention of RMDs in the surrender-charge section at all. Assume the 10% free-withdrawal cap applies and any RMD above that gets surrender-charged.

Where to verify this independently

Don't just take our word. The aggregation rule and the RMD-friendly contract provisions are well-documented. Verify here:

• IRS Publication 590-B (the official RMD reference): irs.gov/pub/irs-pdf/p590b.pdf — search for "aggregate" in the IRA RMD section.
• Treas. Reg. §1.408-8 Q&A 9 — the aggregation procedure: law.cornell.edu/cfr/text/26/1.408-8
• Stan The Annuity Man on MYGAs & RMDs: stantheannuityman.com/blog/mygas-and-rmds-what-you-need-to-know — independent (he's not paid by carriers) and the most-cited public reference on this topic.
• Annuity Rate Watch (broker tool — real-time MYGA rates across carriers): annuityratewatch.com — shows surrender schedules and contract details.
• The Annuity Expert — RMD-Friendly Annuities: annuityexpertadvice.com/rmd-friendly-annuities
• Individual carrier product spec sheets: request the "Product Summary" or "Sample Contract" from the carrier (Aspida, Oceanview, Athene, etc.) — they're public and contain the surrender-charge schedule and the RMD waiver language verbatim. Any licensed agent or IMO (Independent Marketing Organization — the wholesale shop that distributes carrier products to agents) can pull these for you in 60 seconds.

What to ask a carrier or agent

1. "Is this a CASH VALUE annuity (MYGA) or an INCOME annuity (SPIA/DIA)?" Only cash-value contracts work for the RMD valve strategy — you need an actual accessible balance to draw RMDs from. SPIAs and DIAs convert your money into a fixed stream of payments with no balance, so there's nothing to "pull" in a down year. The payments themselves are the distributions, and the strategy doesn't apply.
2. "Does this contract allow penalty-free withdrawal of my aggregate IRA RMD, not just the RMD calculated on this contract's balance?"
3. "Can you point to the specific contract language — and put it in writing?" Ask for a cash-value confirmation letter and the surrender-charge schedule in writing before signing. If they can't or won't, that's your answer.
4. "What's the surrender charge schedule on dollars above the RMD?" Even with RMD exemption, knowing your normal liquidity matters.
5. "What's the current AM Best rating?" A- or better is the comfortable line.

11.The playbook — how to actually use this, step by step

If you're sold on the concept and want to execute, here's the no-BS sequence. Print this. Hand it to your advisor. Read it to yourself before you sign anything.

12."What about a CD?" — the honest yield comparison inside an IRA

A reasonable question we hear constantly: "Why not just use a CD?" Here's the honest answer that most annuity articles skip.

CDs are great — but they don't really fit inside a tax-qualified retirement account. Inside a 401(k), CDs are essentially never an option. Inside an IRA at a brokerage (Fidelity/Schwab/Vanguard), you can buy "brokered CDs," but these are middleman products with less variety, less yield, and shorter lock-in horizons than the bank CDs you'd buy directly outside an IRA.

So the real comparison isn't "MYGA vs the best CD in the country." It's "MYGA vs what's actually available inside the IRA where your RMD money lives." Here's that comparison on $100,000 over 5 years:

What the deltas look like in plain dollars:

• MYGA vs Brokered CD: +$3,068 over 5 years (~$614/yr) — modest, but the MYGA also locks longer and adds the RMD waiver
• MYGA vs Treasury Bills: +$7,266 over 5 years (~$1,453/yr) — meaningful, and Treasuries can lose price if rates rise
• MYGA vs Money Market: +$9,031 over 5 years (~$1,806/yr) — biggest spread, and money market rates float (no guarantee)

The honest framing: a MYGA isn't a magical product. It's just the highest-yielding contractually-guaranteed fixed-income option you can put inside an IRA right now. If MYGA rates drop back to 3% in 2027-2028 (which they likely will when the Fed cuts more), the case weakens — at that point money market or short Treasuries might be the smarter "RMD bucket." Today, with MYGAs at 5.4-6.0%, the spread vs the IRA-internal alternatives is real and worth capturing.

For 401(k) money specifically: MYGAs aren't typically available inside a 401(k). To use this strategy, you'd need to roll the 401(k) to an IRA first — which is a separate decision worth thinking through (it also unlocks better fund choices, lower fees, and aggregable RMDs). We can walk through that conversation when you call.

13.The active alternative — what I call "gardening"

There's a totally different way to solve this problem that doesn't involve a MYGA at all. I call it "gardening" — and for some retirees it's the better answer. Worth understanding both approaches honestly so you can pick the right one for you.

What "gardening" actually means

The gardening strategy is simple in concept, hard in execution:

1. When stocks are HIGH (you sense the market is frothy or overvalued), sell some shares well in advance of when you'll need the RMD. Move the proceeds to cash inside the IRA.
2. Hold that cash in Fidelity's money market (SPAXX ~4.0%) or short Treasuries (~4.2-4.4%). Use it to fund your RMDs.
3. When stocks CRASH — and they will — that becomes your "buying opportunity." You don't have to touch the equity portfolio because the cash bucket is paying the RMD. Better yet: any excess cash you've built up gets deployed into stocks at depressed prices.
4. The discipline: sell winners when nobody wants to (everyone's euphoric at highs), buy losers when nobody wants to (everyone's panicking at lows). The MYGA strategy is automated. Gardening is active.

Gardening is essentially a two-fund glide path with tactical rebalancing: equities for growth, cash for RMD funding, with active harvesting when valuations look stretched and aggressive re-entry when they crater. Done well, it can outperform the MYGA strategy because the cash slice doesn't just sit at 4% — it gets redeployed into stocks at the bottom for the recovery upside.

MYGA vs Gardening — head to head

Which is better? Honestly, it depends.

Gardening wins if you are:

• Disciplined enough to sell winners when CNBC is euphoric (most people aren't)
• Brave enough to deploy cash into stocks during a 30% crash (most people freeze)
• Engaged with markets — you enjoy reading earnings reports, tracking valuations, debating Fed policy
• Tax-aware — you know how to harvest losses, manage gain realization, and balance asset location
• Willing to put in 2-4 hours per month managing the portfolio

MYGA wins if you are:

• Honest with yourself that you wouldn't sell at peaks (almost nobody actually does)
• Not sure you'd buy aggressively at bottoms when everyone is screaming "this time is different"
• Done with active management — retirement is supposed to be the rest period, not another job
• OK with giving up potential upside for guaranteed certainty
• Wanting your spouse to inherit something simple they don't have to manage

The honest summary: a disciplined investor with skill and time can probably outperform the MYGA strategy through gardening. The catch is that most retirees aren't that investor, and the cost of getting gardening wrong is bigger than the gain from getting MYGA right. The MYGA strategy is the "default that wins most of the time without thinking." Gardening is the "advanced move that wins more if you're actually good at it."

There's also a hybrid version many retirees end up doing: anchor a slice in a MYGA (the boring, guaranteed bucket) and garden the rest. Gets the guaranteed yield on part of the portfolio while preserving optionality on the equity side. That's actually what most of our wealthier clients end up doing.

14.The bottom line

The strategy in one sentence:

Put 10–20% of your traditional IRA in a MYGA (or a small ladder of MYGAs), source your RMDs from it in down years, source your RMDs from the market in up years. The carrier eats the sequence-of-returns risk on the buffered slice.

Why this matters:

• You will almost certainly hit a down year (~99% probability over 15 years).
• Without a buffer, that down year forces you to sell stocks at the bottom — locking in losses you would otherwise recover.
• Across 15 years, the expected cost of pulling RMDs from the wrong bucket can run $200–400K on a $2M IRA. The calculator quantifies your specific number.
• MYGA rates today (5.4–6.0%) are unusually high because of where bond yields sit. The window probably normalizes within 2–4 years.
• "RMD-friendly" means penalty-free on the RMD amount, not the full balance — size the contract or build a ladder accordingly.
• Not all carriers honor the aggregate-RMD provision — confirm the contract language before buying.

If this resonates and you want to run the math on your specific situation, the calculator does it in real time: