10-Year Treasury vs 10-Year MYGA (2026): Long-Duration Decision

The long-end comparison

10-year Treasuries are the standard benchmark for long-duration risk-free dollar income. They're the most liquid security in the world, with a daily trading volume in the hundreds of billions. 10-year MYGAs are less common than 5-year, but several A-rated carriers offer them at meaningfully higher yields than the Treasury. That reflects an illiquidity premium captured through the carrier's investment portfolio.

Side by side

The duration play

A 10-year Treasury's modified duration is approximately 8.4 years. That means:

• If 10-year yields drop 100 bps (from 5.17% to 4.17%): bond price rises ~8.4%
• If 10-year yields rise 100 bps (from 5.17% to 6.17%): bond price falls ~8.4%

For investors who believe rates will fall, the 10-year Treasury offers capital-gain potential on top of its 5.17% yield (September 25, 2026). The MYGA offers no equivalent. Its yield is locked for the term regardless of rate moves, but you can't capture price appreciation.

This is the only meaningful structural reason to prefer a long-dated Treasury over a long-dated MYGA on yield grounds alone: the option-like upside on rate cuts.

Worked example: $250K over 10 years (illustrative June 2026 rates)

California resident (top federal + 10.3% state)

10-year Treasury at 4.25%:

• Annual pre-tax interest: $10,625
• Federal tax (37%): $3,931
• State tax: $0 (exempt)
• After-tax annual: $6,694
• 10-year after-tax total: $66,940

10-year MYGA at 5.65% (annual compounding):

• Ending value at year 10: $432,650
• Gross gain: $182,650
• Federal tax (37%) + state tax (10.3%) at withdrawal: $86,393
• After-tax 10-year gain: $96,257

MYGA wins by $29,317 over 10 years, a 44% larger advantage than the same comparison delivered for the 5-year horizon. The longer the deferral period, the more compounding compresses the Treasury's state-tax advantage.

Florida resident (no state tax)

10-year Treasury: After-tax 10-year total: $66,940.

10-year MYGA: Gross gain $182,650. Federal tax only (37%) at withdrawal: $67,581. After-tax: $115,069.

MYGA wins by $48,129 in Florida, a 64% bigger advantage than CA.

When the 10-year Treasury wins

• You're betting on falling rates and want capital-gain exposure. A 10-year at 4.25% becomes worth ~108-110 cents on the dollar if 10-year yields drop to 3.25%. The MYGA has no upside on rate moves.
• You need certainty of liquidity at any time. 10-year Treasury secondary market is the deepest in the world. MYGA surrender charges are real.
• You're under 59 1/2 and might withdraw. IRS 10% penalty on MYGA gains; no equivalent for Treasuries.
• Pure-Treasury safety with no carrier exposure. No state guaranty fund dependency.
• You want duration in a portfolio of other assets. Long Treasuries hedge equity drawdowns historically. MYGAs don't.

When the 10-year MYGA wins

• You can confidently leave the money for 10 years. The 10%/yr free withdrawal provision handles partial needs without penalty.
• You want maximum tax deferral. 10 years of compounding gross inside the contract is materially better than 10 years of annual coupon tax.
• You want yield maximization over duration positioning. 140-150 bps locked premium for a decade is meaningful.
• You're in a high tax bracket now and expect lower in retirement. Defer the tax, withdraw at lower rate.
• You'll 1035 exchange at maturity into an income annuity. Tax-free roll into a SPIA at age 75 captures both the MYGA yield premium and the deferred-tax compounding.

The hybrid (and the duration overlay)

For investors who want both the MYGA's yield premium AND some duration exposure to play rates:

• $200K into 10-year MYGA at 5.65% (yield premium + tax deferral)
• $50K into 10-year Treasury at 4.25% (duration play, state-tax exempt, secondary liquidity)

If rates drop sharply, you capture the Treasury's price appreciation on the $50K slice while the $200K MYGA continues earning 5.65%. If rates stay flat or rise, the MYGA's yield premium dominates.

FAQ

Can I lose money on a 10-year Treasury?

Yes if sold before maturity in a rising-rate environment. Held to maturity, you receive par ($1,000 per bond) regardless of rate moves. The intervening 10 years of price volatility doesn't matter if you don't sell.

Are 10-year MYGAs common?

Less common than 5 or 7-year, but available from several A-rated carriers (Athene, Mass Mutual, Pacific Life and others). Always 10-year MYGAs trade liquidity for the highest available locked yield.

What's the duration of a 10-year MYGA?

Functionally similar to a 10-year zero-coupon bond: all return concentrated at maturity. From a portfolio-management perspective, it adds 10 years of duration. Practically, you can't trade out of it without surrender charges, so the duration exposure is illiquid.

Should I buy 10-year MYGAs in a Roth IRA?

It's allowed but rarely optimal. Roth's tax-free growth makes the MYGA's tax deferral redundant. Most strategists prefer holding higher-growth assets (equities, REITs, TIPS) in Roth wrappers and locking MYGAs in traditional IRAs or taxable accounts.

What happens if my MYGA carrier becomes insolvent during the 10-year term?

State guaranty fund covers up to $250-300K of cash value per owner per carrier. For amounts above the guaranty limit, split across multiple A-rated carriers. No A-rated MYGA carrier has defaulted on contractholder obligations in the modern era.

Can I get a 10-year Treasury STRIP for zero-coupon exposure?

Yes. Treasury Separately Traded Interest and Principal Securities (STRIPS) give you a zero-coupon Treasury at any maturity. They avoid the annual coupon income but generate phantom-income tax on an accrual basis, so they're best held in IRAs. Outside IRAs, MYGAs deliver similar 'zero-coupon-like' compounding without the phantom-income problem.

Are 10-year MYGAs available in all states?

Most. A few states (NY, CA) have additional carrier-licensing rules that limit which carriers offer which products. An independent agent licensed in your state can pull options.

Can I add money to my MYGA over time?

Most MYGAs are single-premium (one deposit, one contract). Some carriers offer flexible-premium MYGAs that accept additional deposits at the rate posted at deposit time.

Related reading

• 5-year Treasury vs 5-year MYGA
• 30-year Treasury Bond Review
• Treasury laddering
• TIPS vs MYGA
• Best MYGA Rates 2026

Disclosure

This review reflects publicly available Treasury auction results, TreasuryDirect documentation, and approximate market yields as of the date stated above. Treasury yields change daily; current yields differ from prior auctions and may differ from those shown here. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific security or insurance product. U.S. Treasury securities are backed by the full faith and credit of the United States Government. MYGA references compare Treasury yields against approximate rates from A-rated insurance carriers as of the date stated; carrier rates change monthly. State guaranty fund coverage on annuities is provided by the state insurance department and varies by state (typically $250,000-$300,000 per owner per carrier). Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated annuity carriers; he is NOT a registered investment advisor, broker-dealer, or registered representative, and is not paid by the U.S. Treasury, TreasuryDirect, or any brokerage for this review. No compensation has been received from any third party in connection with this content. Always read the actual offering documents and consult a licensed advisor before purchasing any security or annuity. Tax discussion of 31 U.S.C. §3124 and Internal Revenue Code provisions reflects law as of 2026 and is subject to change.