General annuity questions
When you buy an annuity, you put your money in a contract with an annuity provider, usually an insurance company. You give them money, and in return, they give you a guarantee they'll return the money plus interest in the form of reliable retirement income.
Though people often think about annuities as investments, they're actually insurance products. Insurance is all about transferring risk to someone else. When you buy an annuity, you essentially transfer the risk of outliving your money to a life insurance company.
You can fund a USAA annuity with any of these:
- An electronic transfer from a bank account
- 401(k) rollover
- IRA transfer
- A 1035 exchange from an existing annuity
Note that you can't fund an annuity directly with stocks, mutual funds or other investments. You'll have to cash those in first and then have the cash balance sent to USAA to fund the annuity.
After you complete our annuity application, download one of the following forms to fund your USAA annuity:
If you live in New York, use this IRA Transfer Form.New York IRA Transfer Form
Each form will tell you how you can get the completed form and funds back to us.
If you're using a wire transfer to fund a USAA annuity, please be aware that your external financial institution may charge a wiring fee to send us the money. But we don't charge a fee for receiving a wire transfer from an external financial institution.
Fixed index annuities
You can fund it with a transfer from a bank account, 401(k), IRA or existing annuity. Or you could use the cash value of a life insurance policy.
The interest rate you get on your account depends on how well the S&P 500® index did over a certain period of time. Dividends aren’t included.
If the change is positive, we'll give you that percentage up to a limit, which is called the cap rate. If the S&P 500® index hasn’t gone up, your account's value remains the same.
The participation rate for the USAA Fixed Indexed Annuity is 100%. That means you'll receive 100% of the index return percentage up to the cap rate.
On the anniversary of your annuity, the cap rate on your indexed account and the interest rate for your fixed account may change. At that time, we'll also determine any rate changes for the following year. Rates will be at least as high as the guaranteed minimums.
You can view our highly competitive rates on our fixed index annuity page.
Immediate annuities
An immediate annuity, sometimes called an income annuity, lets you quickly turn some of your savings into a reliable stream of income. You put in a lump sum and start receiving payouts within a year. You can choose to get guaranteed payouts for life, a set period, or both.how to set up an annuity
To find out if an immediate annuity is right for you, read more about USAA's single premium immediate annuity.
Like its name indicates, an immediate annuity starts paying out right away or within a year.
No. An immediate annuity starts paying out within 1 year. Once payments start, you can't change, delay or defer them.
People often use immediate annuities to generate enough fixed income to cover their basic monthly expenses. This fixed monthly income can help you pay your bills and avoid running out of money in retirement.
If you're already retired or getting close to retirement, an immediate annuity could be a great option for you. Read more about USAA's single premium immediate annuity.
It depends on the funds you use to buy the annuity. If you buy it with pre-tax funds, you'll pay federal income tax on all your payouts. But if you buy it with after-tax funds, the IRS knows you've already paid taxes on that money. In that case, you'll only pay federal income tax on the part of your payouts that counts as earnings. You won't pay taxes on the principal.
Deferred annuities
A deferred annuity lets you grow money tax-deferred and turn it into income later. Your money grows at a fixed rate or a mix of fixed and market-based rates, depending on the annuity. annuity common questions When you retire, you can start getting guaranteed payouts.
To explore the products we offer, visit our deferred annuity page.
The money you earn from interest is automatically put back into your account. This keeps your account growing.
The main difference is when you start getting paid. With a SPIA, your payments start almost right away, usually within a year of your purchase. With a deferred annuity, you wait to get paid until a later date, like when you retire. This gives your money time to grow.
You can view current deferred annuity rates on our annuity rates page.
Yes. After you've had your deferred annuity for 1 year, you can use it to create income.
A benefit of saving in a deferred annuity is that your money grows tax-deferred. When you take money out, the earnings are taxable. Only money you haven't paid taxes on yet is taxed when you take it out.
No. We only offer single-premium annuities. You can buy it with 1 lump sum. You can choose to open more than 1 over time. To find the right fit, call a Retirement Income Specialist at 800-833-9847.
Safety and financial strength
No. Annuities come from life insurance companies, not banks. So they aren't covered by the Federal Deposit Insurance Corporation, or FDIC. But every state has an organization that helps protect you and your money if an insurance company can't pay what it owes.
USAA has been providing financial products and services to members for over 60 years. With us, you get more than competitive rates. You get financial strength and exceptional service, too.
We maintain top-tier grades from all 3 key rating agencies. We also earn some of the highest scores in customer satisfaction for annuities. Our Retirement Income Specialists are ready to help you prepare for the retirement you've worked so hard for. To speak with one, call 800-833-9847.
401(k) and IRA
Yes. You can use an IRA to buy an annuity. For example, you can use a traditional IRA to buy one with pre-tax dollars. To learn about other ways to use an IRA to fund an annuity, call a USAA Retirement Income Specialist at 800-833-9847.
It depends on your plan. If you're leaving your job, you may be able to move all or part of your funds into an annuity. You can do this by moving the money into an IRA first.
For more information, talk with your employer's retirement plan administrator.
Life events and beneficiaries
The Critical Care Waiver lets you withdraw funds to pay for qualifying critical care costs without a surrender charge. After the first contract year and before the annuity date, you can take out up to $100,000 or 50% of the annuity's value, whichever is less, with no surrender charge. Check your contract for more details. This waiver may vary by state.
Yes. Our annuities come with a joint and survivor payout option. If you choose this option, your annuity — whether it's deferred or immediate — will pay out to both you and your spouse for as long as one of you is alive. Payouts are slightly lower than they would be for just one person because they'll likely last longer.
Yes. You choose your own beneficiaries. You can add or change them at any time.