Annuities FAQ

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:

• Direct Rollover Instructions
• IRA Transfer Form
• 1035 Exchange Form

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.

The interest rate credited to your account is based on the performance of the S&P 500® over a particular time period. Dividends aren't included.

If the percentage of the change is positive, we'll credit that percentage to your account up to a maximum amount, which is called the cap rate. If the S&P 500® hasn't gone up, your account 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.

Like its name indicates, an immediate annuity starts paying out right away or within a year.

No. An immediate annuity starts paying out within one year. You can't change, delay or defer payments once they've started.

People often use an immediate annuity 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 the annuity with pre-tax funds, then you'll pay federal income tax on all your payouts. But if you buy the annuity with after-tax funds, the IRS recognizes that you've already paid taxes on that money. In that case, you'll only pay federal income tax on the portion of your payouts that's considered earnings. You won't pay taxes on the principal.

A deferred annuity is designed for guaranteed tax-deferred growth. This allows you to accumulate retirement savings and in the future you have the option to turn it into income. An immediate annuity lets you quickly turn some of your retirement savings into a reliable stream of income. Read more about the different products we offer on our annuities page.

You can view our highly competitive deferred annuity rates on our deferred annuity page.

Yes. After owning your deferred annuity for one year, you can use it to generate income.

One benefit of saving in a deferred annuity is that your money grows tax deferred. Once you withdraw money from the annuity, the earnings will be taxable.

USAA currently offers annuities that are single-premium only. That means you acquire them with a lump sum payment. You could open several single-premium annuities over time. Our Retirement Income Specialists can talk to you about options that might be right for you. Call them at 800-833-9847.

USAA has been providing financial products and services to our members for more than 60 years. With us, you'll get more than just competitive rates. You'll get financial strength and exceptional service too.

We maintain top-tier grades from all three key rating agencies.‍ ‍ And we consistently achieve some of the highest scores in customer satisfaction for annuities. Our dedicated 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.

It depends on your plan. If you're leaving your employer's plan, you may be able to convert all or part of the funds into an annuity. annuity common questions You can do this by holding it in an IRA that can fund the annuity.

For more information, talk with your employer's retirement plan administrator.

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.

You can choose your beneficiaries.