General annuity questions
When you buy an annuity, you sign a contract with an annuity provider, usually an insurance company. You put your money into an account, and in return, they pay you back with interest. That gives you a steady retirement income. The goal is to keep your money somewhere safer than the stock market, where values can go up and down. In an annuity, the value of your money stays more stable.
People often think that annuities are investments. But they're really insurance products. Insurance is all about transferring risk to someone else. When you buy an annuity, you transfer the risk of outliving your money to a life insurance company.
You can fund a USAA annuity with any of these:
- Bank account transfer
- 401(k) rollover
- IRA transfer
- 1035 exchange from an existing annuity
You can't use stocks, mutual funds or other investments to directly fund an annuity. You'll need to cash those in first and then send the cash to USAA to fund your annuity.
After you complete our annuity application, download 1 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 use a wire transfer, your financial institution may charge a fee to send money to your USAA annuity. We don't charge a fee to receive it.
Fixed index annuities
You can fund it with any of these:
- Bank account transfer
- 401(k) rollover
- IRA transfer
- Existing annuity
- Cash value of a life insurance policy
The interest you earn depends on how well the S&P 500® index does over a set period. Dividends aren't included.
If the index goes up, we'll credit your account with that percentage up to a limit. This limit is called the cap rate. If the index doesn't go up, your account value stays the same.
The participation rate is 100%. This means you'll receive 100% of the index return up to the cap rate.
Each year, 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 set the rates for the following year. Rates will be at least as high as the guaranteed minimums.
You can view our current rates on our fixed index annuity page.
Immediate annuities
An immediate annuity, also called an income annuity, lets you turn some of your savings into a steady stream of income. You pay a lump sum and start getting payouts within a year. You can choose payouts for life, a set period or both.how to set up an annuity
Want to learn if it's right for you? Read more about the single premium immediate annuity.
True to its name, 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.