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Independent Review of the USAA Extended Guarantee Annuity (EGA)

What is covered in this annuity review?

In this review, we’ll cover the following information on the USAA Extended Guarantee (EGA) Fixed Annuity: USAA Annuities
  • Product type
  • Fees
  • Current rates
  • Realistic long-term return expectations
  • How it is used
  • How it is most poorly used

Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.

Over the past several years, annuities have become a much more popular component of retirement planning. One reason for this is because, as people are living longer, having a retirement income that lasts much longer is necessary – and unlike any other insurance or financial product in the market place, an annuity is the only vehicle that can truly guarantee you an income for the remainder of your lifetime, regardless of how long that is. Fixed annuities have become particularly favored by those who are at or approaching retirement time, as people are not nearly as apt to trust their savings to an extremely volatile stock market. So, if you’ve been considering a fixed annuity like the Extended Guarantee Annuity from USAA because you want to ensure that your money is safe and that you’ll have lifetime income that you can count on, this product could be a viable option for you. However, before you go out and purchase it “sight unseen,” it is important that you know just exactly how the annuity works, and how it may – or may not – work for you and your specific financial objectives.

Annuity and Retirement Income Planning Information That You Can Trust

If this is the first time that you have visited our website, then please allow us to officially welcome you here to We are a team of annuity experts who focus on offering very comprehensive – and unbiased – annuity reviews. We have been doing this for quite a few years now – longer than our competitors. And, because of the in-depth reviews that we provide here, we have become a highly trusted source of annuity information online. Over the past decade or so, however, there have been a number of “copycat” websites that have popped up on the Internet. While some of these sites can give you information about annuities, what you are more likely to find is that they are oftentimes just simply reiterating what our information already shows. If you have been researching annuities on the Internet lately, it is likely that you also have run across conflicting information regarding these financial vehicles. That really is not very surprising, though, as there are many, many annuities out there in the market place, and just about everyone seems to have a differing opinion about them. It could be that you’ve recently attended an annuity seminar. Here, the presenter may have given you more in-depth details about the USAA Extended Guarantee Annuity (or some other, similar product). And it may even be your attendance at this seminar that has led you here to our website in search of additional information. In doing so, you might have landed on some other annuity marketing websites that focus on luring visitors in for the purpose of obtaining their contact details. These sites will oftentimes do so by making some fairly bold claims about the annuities they offer, such as:
  • High Annuity Income Payouts
  • Guaranteed Income for Life
  • Top-Rated Annuity Carriers
  • Low Fees
Look familiar? But, as great as these claims might initially sound, it is really important that you verify their validity first before you decide to move forward with a long-term financial commitment. Otherwise, it could end up costing you. That being said, if you are looking for more in-depth information about the EGA annuity from USAA, then you are definitely in the right place. In fact, dare we say that our Annuity Gator site is the only place online where you can get all of the key details – good, bad, and ugly – about this annuity so that you can make a well-informed buying (or non-buying) decision. It is important to note here, however, that in addition to providing you with all of the nice keen benefits of this product, we are also going to lay out the product’s drawbacks. This is so that you will be in a better position to make the right decision as to whether or not this is really the annuity for you. We do want to be clear in that, we believe that annuities are fine products – and they can be quite beneficial to some people – as long as they fit in with your overall financial objectives. This annuity review is here to provide you with what you need to know. So, with that being said, let’s go ahead and get started!

The USAA Extended Guarantee Annuity (EGA) at a Glance

Product NameExtended Guarantee Annuity (EGA)
Type of ProductSingle Premium Fixed Annuity
S&P Rating
Phone Number(800) 531-8722
WebsiteAA+ (Very Strong)

Opening Thoughts on the Extended Guarantee Annuity (EGA) from USAA

USAA has been serving military members and their families for nearly 100 years, with a primary focus on providing insurance, banking, investments, and retirement advice and products. The company was initially founded by a group of Army officers who decided to insure each other, in turn, forming the United States Army Automobile Association. Over the years, the company has expanded to include a variety of other insurance and financial products. As of year-end 2017, USAA had in excess of $77 billion in assets under management, and the company’s owned and managed assets grew to over $260 billion. During 2017, USAA handled more than 287,000 disaster claims, with nearly $15 billion in total claims paid for the year. The company and its subsidiaries rank highly in terms of financial strength and stability, with USAA Bank being the 28th largest bank (based on U.S. bank deposits of $71 billion). USAA is also ranked as number 102 on the list of Fortune 500 companies. With more than 12.4 million members – and an impressive 98% member retention rate – USAA is also ranked as number 20 on the 2018 list of FORTUNE’s World’s Most Admired Companies. The company has high ratings from the insurer rating agencies, including a(n):
  • A++ from A.M. Best Company
  • Aaa from Moody’s Investors Services
  • AA+ from Standard & Poor’s
With so much volatility and unpredictability in the stock market over the past several years, the demand for fixed annuities has grown quite a bit, particularly as a way for retirees (and those who are preparing for retirement in the near future) to keep assets safe, and to ensure that they have a stable and reliable income going forward. Unfortunately, though, due to the historically low interest rate environment that we’ve been stuck in for nearly a decade now, the return that has been offered by fixed annuities has been very low. In fact, in many instances, the returns that are obtained on fixed annuities have not even been enough to outpace the inflation rate over time. Because of these low rates, your future purchasing power could be affected – especially if you plan to use the income from a fixed annuity as a primary source of your retirement income down the road.

Before we get into the gritty details, here are some necessary legal disclosures…

This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. USAA has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners. For additional information on how to compare fixed annuities so that you can decide which may be the best one for you, click here in order to obtain our free annuity report.

How USAA Describes the EGA Annuity

On the USAA website, the Extended Guarantee Annuity is described as a deferred fixed annuity product where you can put in a lump sum of money and earn a guaranteed interest rate for a certain period of time. The money in this annuity – as with other types of deferred annuities – grows on a tax-deferred basis. Your initial interest rate is guaranteed for ten years. The rate that you receive is based on the amount of money that you deposit into the annuity. To see the current rates on the USAA Extended Guarantee annuity, go HERE. After that time, your money will continue to earn interest – although your interest rate could change. The money in the annuity will grow daily, and when you retire, you can start receiving guaranteed monthly payments that you cannot outlive. While you are only allowed to withdraw up to 10% per year from the annuity penalty-free (during the surrender period), you may be able to take out more, without incurring a surrender charge, if you qualify, based on a particular illness or long-term care situation. By and large, the Extended Guarantee Annuity from USAA isn’t fancy. In fact, while it’s not bad, it really doesn’t stand out amongst a long list of other fixed annuities that you could purchase in the market.

How an Insurance or Financial Sales Person Might “Pitch” the EGA Annuity from USAA

If you’re like most people, you probably love guarantees – especially as it pertains to your money. So, if you’ve been approached by an insurance or financial advisor about the USAA Extended Guarantee Annuity, it is likely that he or she zeroed in on the ten-year interest rate guarantee on this product. Plus, the more money you contribute to the annuity, the higher that rate will be – so the agent may also have prompted you to consider depositing a considerable amount. On top of the rate guarantee with the EGA annuity from USAA, you can also count on a lifetime stream of income for the remainder of your life, if you choose the lifetime income option. This can help to alleviate the worry about running out of income in your later years…which is becoming a growing concern as more people are living longer life spans today. But, while these guarantees may help you to sleep a bit better at night, the reality is that such benefits can oftentimes come at a cost – this being the low rate that is offered, and in turn, the inability to beat, or even meet, future inflation. This could equate to a step backward in future lifestyle, as it could hinder your ability to keep up with the rising cost of the goods and services you need in retirement. This can be of particular concern here because the interest rate will be locked in for ten full years. With that in mind, you really need to determine whether or not you are willing to take the “tradeoff” here – in other words, giving up the opportunity for more growth in return for keeping your principal safe.

What About the Fees on the USAA Extended Guarantee Annuity (EGA)?

While there are no annual maintenance fees on the EGA annuity, you could run into some significant charges if you opt to take out more than 10% of the contract’s value within the first ten years. In fact, it is typical that annuities offering a rate lock for a certain number of years will have a surrender charge that corresponds to that guaranteed rate period. So, the longer your interest rate is locked in, the longer your surrender period will be. In addition, if you take a withdrawal from the annuity before you turn age 59 ½, you could also be hit with ANOTHER fee – an IRS early withdrawal penalty. So, with that in mind, think of this (or any) annuity as a long-term financial commitment.

The Annuity Gator’s End Take on the USAA Extended Guarantee Annuity

Where this annuity can work best: Although the USAA Extended Guarantee Annuity (EGA) may not be right for everyone, it could be a good option if you are looking for the following benefits:
  • Fixed interest rate for a set number of years – in this case, ten
  • Safety of principal – regardless of what happens in the stock market
  • Guaranteed lifetime income
Where this annuity may not be up to par: Yet, even with the benefits that it offers, this annuity may not be right for you if you are seeking:
  • The opportunity for a higher rate of growth
  • The ability to withdraw your funds penalty-free in the first ten years
  • This annuity may also not be right if you do not intend to use the lifetime income feature.

In Summary

There are a number of key factors that should really be taken into consideration if you are thinking about purchasing a fixed annuity. These should include – but they are not limited to – how the annuity can produce a return, how safe your money will be, how the income will pay out, and whether or not there are any other optional features that may be added to the annuity (as well as any added costs). In the case of the EGA annuity, you also need to determine whether or not you are willing to trade off ten years of having a low rate locked in with the potential for a surrender charge if you need access to your money. In any case, if you are still considering the EGA annuity, you can definitely be assured that your principal will be safe and that you can count on a lifetime guaranteed income, no matter how long you may live. Yet, even with all of the seemingly nice features that are included with this annuity, there could still be a better alternative out there for you – particularly if you are seeking the opportunity for a higher return. Quite frankly, the only way to really know how this product could perform based on your specific situation and needs is to have it tested. We can do that for you by running the numbers through our annuity calculator, and can then provide you with a spreadsheet showing the results. In order to receive this information, just simply contact us via our secure online contact form here.

Have Any Additional Questions About USAA Extended Guarantee Annuity? Did You Happen to Notice Any Mistakes in this Annuity Review?

While we know that this annuity review was fairly lengthy, we would much rather “err” on the side of being “too long” as versus not being long enough. Given that, we would like to say thanks to you for sticking with us here to the end. That said, if you found that this annuity review was helpful for you, then please feel free to forward it on to anyone else that you think may benefit from it. Alternatively, if this review led you to have even more questions, then please let us know that, too. Are there any other annuities that you would like to see reviewed? There are lots and lots of annuities available in the market place today. So, if you would like to see a particular annuity reviewed, then just let us know the name of the annuity (or annuities), and our team of annuity “geeks” will get on the case. So, be sure to check back soon for the new reviews. Best, The Annuity Gator P.S If you would like to read more of our USAA annuity reviews here are a link to check out: Independent Review of the USAA Extended Guarantee Annuity (EGA)  
  • CHRISTINE MacManus
    3:17 PM, 21 October 2020

    We are trying to help an older cousin make decisions about 2 USAA annuities that the bank recommended to her when she was 77. It begins to pay without penalty when she is 87 and she is now an 82 year old widow with her savings tied up in these 2 annuities for another 5 years. They are for approximately $14,000 and 23,000. Would you advise her to pay a penalty and taxes now? She feels like the annuity might not pay out until after her death and lives frugally now. Thanks for some insight.

  • Annuity Gator
    3:25 PM, 21 October 2020

    Hi Christine – Thank you for your message.
    We would be happy to set up a time to go over an annuity test. This can help you to determine how the annuity is performing for your cousin, and also give a direction for moving forward. In order to provide you with the best advice, we would need to get a bit more information from you. Rather than emailing sensitive details back and forth, though, it would be best to chat via phone. Please feel free to reach out to us directly, toll-free, at (888) 440-2468 to chat with one of our annuity specialists or visit
    We look forward to chatting with you.
    Annuity Gator

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