To open an account, fund it with a lump sum or rollover. Your money earns interest based on how the S&P 500 index performs, up to a set cap rate.
What's a fixed index annuity?
A fixed index annuity is a way to plan for retirement. It lets your money grow based on how a market index does, up to a set amount. And your money isn't at risk if the market goes down.
Because of this, it can offer more opportunity for protected growth than a traditional fixed annuity.
Fixed indexed annuity
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You're doing the right thing by putting money aside so you can enjoy a secure future. You may have considered investing, but the ups and downs of the stock market may make you nervous. If you're looking for protected growth with low risk, a USAA Fixed Indexed Annuity might be the right choice for you.
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A fixed index annuity, or FIA, is an annuity that gains interest based on how the S&P 500 market index performs each year up to a certain limit. And since your money isn't directly invested into the stock market, the money you put in is protected against any downturns.
That means even if the S&P 500 has a year with negative returns, your account will not lose money or gain interest.
The interest you earn is tax-deferred, so you won't pay taxes until you withdraw your money. As a result, your money grows faster allowing you to earn even more.
Plus, you can feel confident knowing that your money is backed by the financial strength of USAA Life Insurance Company.
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So, if you are looking for protected growth with potential to earn more than a fixed rate, tax-deferred growth potential and an optional source for guaranteed income, a fixed index annuity may fit your needs.
Schedule a call with a USAA Retirement Income Specialist today to see if a fixed index annuity is right for you.
Description of visual information: [The "S&P 500®" is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and has been licensed for use by USAA LIFE USAA LIFE INSURANCE COMPANY AND USAA LIFE INSURANCE COMPANY OF NEW YORK. S&P®, S&P 500®, US 500, The 500, iBoxx®, iTraxx® and CDX® are trademarks of S&P Global, Inc. or its affiliates (“S&P”); Dow Jones. ® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by USAA LIFE INSURANCE COMPANY AND USAA LIFE INSURANCE COMPANY OF NEW YORK. USAA Fixed Indexed Annuity is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500®.
Money not previously taxed is taxed as income when paid. Withdrawals before age 59 1/2 may be subject to a 10% federal tax penalty.
An annuity is a long-term insurance contract sold by an insurance company designed to provide an income, usually after retirement, that cannot be outlived. There are fees, expenses and surrender charges that may apply.
Examples given are hypothetical illustrations and not necessarily an indication of the benefits or features of any USAA product.
Fixed Indexed Annuity (FIA): Forms ICC2399755 06-23, ASP504431ST 07-23, ASP504389FL 07-23
Life insurance and annuities provided by USAA Life Insurance Company, San Antonio, TX and in New York by USAA Life Insurance Company of New York, Highland Falls, NY. All insurance products are subject to state availability, issue limitations and contractual terms and conditions. Each company has sole financial responsibility for its own products.] End of description.
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Key details about the USAA Fixed Indexed Annuity
We offer a 100% participation rate, which means you get all of the index gains up to the cap rate. Plus, you can take out up to 10% of your money each year for free after the first year.
Current cap rate
§%
A cap rate is the highest interest you can earn based on market performance over a set period.
Term
7 years
This is how long your money must stay in the account before you can avoid surrender charges.
Minimum to open
$100,000
This amount makes sure you have enough money to earn interest and benefit from market gains.
Get a guaranteed interest rate on part of your fixed index annuity.
Fixed account interest rate
§ %
This is the guaranteed rate you earn on the fixed portion of your annuity.
After the first year, the rate may change, but it’ll never drop below the minimum guaranteed rate.
How a fixed indexed annuity reacts to market volatility
The return on a 401(k) invested in the S&P 500® index goes up and down with the market. With a USAA Fixed Indexed Annuity, your principal is protected. Let’s explore 3 market examples.
Market example |
Up market |
|---|---|
USAA Fixed Indexed Annuity interest* |
You earn interest up to the cap rate. In an up market like 2024, you could’ve earned §% interest on your account value. |
401(k) invested in S&P 500® Index |
Your plan is dependent on market performance. In an up market like 2024, your account could’ve gained up to 23.31% in value. |
Market example |
Flat market |
USAA Fixed Indexed Annuity interest* |
You can earn interest between 0% and the cap rate. In a flat market like 2006, you could’ve earned 3.53% interest on your account value. |
401(k) invested in S&P 500® Index |
Your plan is dependent on market performance. In a flat market like 2006, your account could’ve gained up to 3.53% in value. |
Market example |
Down market |
USAA Fixed Indexed Annuity interest* |
You won’t earn interest, but your principal stays safe. In a down market like 2008, you could’ve earned 0% interest and kept your full principal. |
401(k) invested in S&P 500® Index |
Your plan is dependent on market performance. In a down market like 2008, your account could’ve lost up to 38.49% in value. |
How a fixed indexed annuity reacts to market volatility
The return on a 401(k) invested in the S&P 500® index goes up and down with the market. With a USAA Fixed Indexed Annuity, your principal is protected. Let’s explore 3 market examples.
| Market example | USAA Fixed Indexed Annuity interest* | 401(k) invested in S&P 500® Index |
|---|---|---|
Up market |
You earn interest up to the cap rate. In an up market like 2024, you could’ve earned §% interest on your account value. |
Your plan is dependent on market performance. In an up market like 2024, your account could’ve gained up to 23.31% in value. |
Flat market |
You can earn interest between 0% and the cap rate. In a flat market like 2006, you could’ve earned 3.53% interest on your account value. |
Your plan is dependent on market performance. In a flat market like 2006, your account could’ve gained up to 3.53% in value. |
Down market |
You won’t earn interest, but your principal stays safe. In a down market like 2008, you could’ve earned 0% interest and kept your full principal. |
Your plan is dependent on market performance. In a down market like 2008, your account could’ve lost up to 38.49% in value. |
The return on a 401(k) invested in the S&P 500® index goes up and down with the market. With a USAA Fixed Indexed Annuity, your principal is protected. Let’s explore 3 market examples.
| Market example | Up market |
|---|---|
| USAA Fixed Indexed Annuity interest* | You earn interest up to the cap rate. In an up market like 2024, you could’ve earned §% interest on your account value. |
| 401(k) invested in S&P 500® Index | Your plan is dependent on market performance. In an up market like 2024, your account could’ve gained up to 23.31% in value. |
| Market example | Flat market |
| USAA Fixed Indexed Annuity interest* | You can earn interest between 0% and the cap rate. In a flat market like 2006, you could’ve earned 3.53% interest on your account value. |
| 401(k) invested in S&P 500® Index | Your plan is dependent on market performance. In a flat market like 2006, your account could’ve gained up to 3.53% in value. |
| Market example | Down market |
| USAA Fixed Indexed Annuity interest* | You won’t earn interest, but your principal stays safe. In a down market like 2008, you could’ve earned 0% interest and kept your full principal. |
| 401(k) invested in S&P 500® Index | Your plan is dependent on market performance. In a down market like 2008, your account could’ve lost up to 38.49% in value. |
*This example assumes you put 100% of your money into the indexed account.
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How does a fixed index annuity work?
Steps to complete How does a fixed index annuity work?
Fixed index annuity FAQ
There are several ways you can add money to a USAA Fixed Indexed Annuity.
- Direct rollover — Move money from an employer-sponsored retirement plan, like a 401(k) or Thrift Savings Plan.
- IRA transfer — Move money from one of your IRAs, like a brokerage account, mutual fund or CD.
- Indirect rollover — Take money from a qualified retirement account, like an employer-sponsored retirement plan or IRA and get the check mailed and made payable to you. Once you get the check, you have 60 days to send the total distributed amount to USAA.
- 1035 exchange — Move money tax-free from an existing nonqualified annuity contract or life insurance policy. The owner and annuitant must be the same for each contract.
- Cash transfer — Transfer cash from a brokerage, mutual fund or bank account to a USAA annuity.
You won't lose the money you put into a fixed index annuity. Even the interest you earn is protected. You can be confident that your money is backed by the financial strength of USAA Life Insurance Company.
Deferred annuities funded with pretax money could be taxable as ordinary income when you make a withdrawal. This applies when your annuity is funded from sources such as a traditional IRA or pretax 401(k).
But if your deferred annuity is funded from a Roth IRA or Roth 401(k), withdrawals will be tax-free as long as you have had your money in a Roth IRA or Roth 401(k) for at least 5 years and are age 59½ at the time you make a withdrawal.
Distributions from a deferred annuity could be taxed as ordinary income if the annuity was opened as nonqualified, meaning the funds didn't come from a qualified retirement plan like an IRA or 401(k).
Both are deferred annuities. The key difference between the two is how they earn interest. Fixed index annuities earn interest based on the performance of a stock market index. Fixed rate annuities earn a simple, set interest rate for a period of time.