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USAA Annuity Review

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This review was produced by SmartAsset based on publicly available information. The named firm and its financial professionals have not reviewed, approved, or endorsed this review and are not responsible for its accuracy. Review content is produced by SmartAsset independently of any business relationships that might exist between SmartAsset and the named firm and its financial professionals, and firms and financial professionals having business relationships with SmartAsset receive no special treatment or consideration in SmartAsset’s reviews. This page contains links to SmartAsset’s financial advisor matching tool, which may or may not match you with the firm mentioned in this review or its financial professionals.

USAA, which stands for United Services Automobile Association, has been providing financial services to its members for nearly a century. The company has its hands in nearly every area of finance, including annuities, bank accounts, insurance policies, mortgages, investment accounts, retirement accounts and more. USAA membership is largely restricted to people affiliated with the US military, and the easiest way to become a member of USAA is to be a member of the armed forces. However, in many cases, these members’ spouses and children will also be eligible for membership.

Annuities can be particularly confusing, as they often include many features, fees, investments and more. Enlisting the expertise of a financial advisor can be extremely helpful when considering an annuity as part of your retirement gameplan.

Annuity Fees Annuity Type Minimum Initial Premium More Information
Fixed Guaranteed Growth Annuity Find an Advisor

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  • No annual contract fees
Fixed annuity $20,000

Annuity Type

Fixed annuity

Minimum Initial Premium

USAA Single Premium Immediate Annuity Find an Advisor

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  • No annual fees
Immediate annuity $0

Annuity Type

Immediate annuity

Minimum Initial Premium


USAA has secured superb financial strength ratings from some of the top ratings companies. A.M. Best has it at an A++ (Superior, highest), Moody’s has it at an Aa1 (Excellent, 2nd-highest) and Standard & Poor’s (S&P) has it at an AA+ (Very Strong, second-highest).

Fixed Guaranteed Growth Annuity

The Fixed Guaranteed Growth Annuity is a deferred, fixed annuity. As a base, you can choose either a 3-, 5- or 10-year guaranteed rate period, during which your money will grow at a set interest rate for the length of that period. Once it ends, you’ll still earn interest, but the rate is subject to change, though USAA does utilize a rate floor. The annuity is light on fees, but the contract calls for an initial investment of at least $20,000 for the 5- and 10-year variations, while the 3-year version requires a minimum investment of $50,000.

Once you begin receiving payments from your annuity, you are guaranteed to receive them for the rest of your life. It also comes with a death benefit. So when you pass away, your chosen beneficiaries will receive what remains in your annuity account.


After the first year, you can withdraw up to 10% of your annuity without paying a surrender charge. If you withdraw more than that, you’ll face a fee on the excess, which will adhere to the following schedule:

Withdrawal Fee Schedule
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11+
9% 8% 7% 6% 5% 4% 3% 2% 1% 0.5% 0%

One exception to this is the Critical Care Withdrawal rule, which allows you to withdraw at no charge to pay for expenses related to nursing home, assisted living or home-health care. Since the annuity is tax-deferred, you’ll face a 10% penalty on any amount you withdraw before you turn 59.5.

Realistic Return Expectations

As of Aug. 2022, guaranteed interest rates for the Fixed Guaranteed Growth Annuity are as follows:

Fixed Guaranteed Growth Annuity Rates
Contribution Amount 3-Year Contract 5-Year Contract 10-Year Contract
Less than $50K 2.50% 3.20% 3.25%
$50K - $100K 2.55% 3.20% 3.25%
$100K - $250K 3.15% 3.60% 3.65%
$250K - $500K 3.15% 3.60% 3.65%
$500K - $1MM 3.15% 3.60% 3.65%
$1MM and higher 3.15% 3.60% 3.65%

USAA Single Premium Immediate Annuity

The USAA Single Premium Immediate Annuity (SPIA) allows you to start receiving payments immediately or within a year after you invest money. There are three payout options with this annuity.

First, you can elect to receive regular payments for a set period of either 10, 15 or 20 years. With this option, you can choose a beneficiary that would receive the remainder of your payments if you die before the term’s end. You can also choose to receive guaranteed payments for the rest of your life. With this option, payments cease once you pass away, and no beneficiary payments are available. In addition, your payments can be fixed or you can have them increase by 1%, 2% or 3% each year.

There’s also a combination of these two options called “Lifetime and a Guaranteed Period of Time.” With this, you choose a guaranteed period and a beneficiary, but you’re also guaranteed payments for your life. Therefore, your beneficiary will only receive payments if you die before the end of your guaranteed period. But if you outlive that preset period, payments will remain for life.


Most immediate annuities come without any contract or maintenance fees, and this one is no exception. The sole charge you might have to worry about is the 10% IRS penalty, which only comes into play if you make a withdrawal before age 59.5.

Realistic Return Expectations

The primary feature of immediate annuities is that you start receiving payments soon after you make your investment. Consequently, returns are often minimal. However, if you choose the lifetime payout option and you live long enough, there’s a possibility that you’ll get more in payments than you initially invested.

Retirement Planning Tips

  • Annuities are complex products, so finding a financial advisor to help you pick one out could be a worthwhile venture. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Just because you have an annuity doesn’t mean that your retirement income plans are set. Be sure to take advantage of every option available to you, such as contributing to a 401(k) via your employer.

All information is accurate as of the writing of this article.

Best Places for Small Business Owners

SmartAsset analyzed data to find the best places for small business owners in the country. This interactive map shows the best counties for small business owners in the U.S. and in each state. Zoom between states and the national map to see the top spots in each region. Also, scroll over any county to learn about that region's small business statistics.

Rank County Small Business Returns Small Business Income Income Taxes

Methodology Which places are best for small businesses owners? To answer this question, we considered three factors: the proportion of people in a county with small business income, how much business income those people reported and the amount of tax a potential resident must pay on their income.

To determine how attractive a region is for small business owners, we compared the number of tax returns that report small business income compared to the total tax-filing population of the region. Next, we compared the total amount of small business income to the overall amount of income reported in each region.

Small businesses are typically incorporated as pass-through entities, meaning that the business owners pay income taxes on the company profits rather than the company itself paying income tax. Because of this, income taxes can play a major role in determining the financial success of a given small business. To determine income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location.

These three factors were then indexed and equally weighted to yield our small business index. Places with the highest small business index are the places which ranked the highest in the study.

Sources: Internal Revenue Service (IRS), US Census Bureau 2018 American Community Survey, Government Sources, SmartAsset