Best Annuity Rates in Mississippi (2026)

Mississippi is one of the most annuity-friendly states in the country – and that is not an exaggeration. Mississippi exempts all retirement income from state income tax. That means annuity withdrawals, IRA distributions, pension income, and Social Security are all taxed at zero percent at the state level. For retirees building guaranteed income from savings, that tax exemption combined with MYGA rates above 5.50% from carriers rated A- or better makes fixed annuities an especially compelling choice.

The rate table below shows today’s best MYGA rates available to Mississippi residents from carriers rated A- or better, updated daily.

Are Fixed Annuities a Good Choice in Mississippi?

Mississippi’s full retirement income exemption makes it one of only a handful of states where a retiree can withdraw annuity income and owe zero state income tax on every dollar. Combined with the federal tax deferral on growth inside a MYGA, the after-tax return advantage over a taxable bank CD is significant – especially for retirees in the 22% to 24% federal bracket.

Consider Patricia, age 65, in Jackson. She has $200,000 in a CD renewing at 3.75%. She moves it into a 5-year MYGA at 5.30%. At maturity, her account reaches approximately $260,053 – a guaranteed gain of $60,053. In Mississippi, all of her annuity withdrawals are completely exempt from state income tax. She pays only federal tax at her ordinary income rate on the gain. Compare that to a taxable CD: the $7,500 in annual CD interest appears on a 1099 every year, taxed federally and – in most other states – at state income tax rates too. Mississippi’s zero-tax treatment on retirement income turns a good MYGA rate into a great after-tax outcome.

Mississippi also has no estate tax and no inheritance tax. Annuity beneficiaries receive the contract value outside of probate, with no Mississippi state transfer tax applied.

Mississippi Guaranty Association: How Your Annuity Is Protected

The Mississippi Life and Health Insurance Guaranty Association protects Mississippi policyholders if a licensed insurance carrier becomes insolvent. Coverage applies automatically – no separate enrollment and no additional cost.

For investments over $250,000, divide funds across multiple carriers rated A- or better. Each insurer has its own separate $250,000 protection limit under the Mississippi guaranty system.

Mississippi Life and Health Insurance Guaranty Association
Website: msiga.org

How Mississippi Taxes Annuity Income

Mississippi exempts all retirement income from state income tax. This is the defining tax feature for annuity buyers in Mississippi. The table below shows how different annuity types are treated at the state level.

Mississippi’s retirement income exemption covers all types of retirement income – there is no partial exclusion or income phaseout for most retirees. Withdrawals before age 59½ may still trigger the 10% federal early withdrawal penalty, and early withdrawals from a non-qualified annuity may not qualify as “retirement income” under Mississippi’s definition – consult a tax advisor if you plan withdrawals before retirement age.

Mississippi Insurance Department

The Mississippi Insurance Department licenses and regulates all insurance carriers and agents operating in the state. Before buying an annuity, verify that the carrier is licensed in Mississippi and that your agent holds an active Mississippi life insurance license.

Tips for Buying an Annuity in Mississippi

• Take full advantage of the retirement income exemption: Mississippi’s zero-tax treatment on retirement income means the after-tax MYGA rate is the same as the gross rate. A 5.30% MYGA in Mississippi beats a 5.30% CD (where CD interest is taxed annually) on an after-tax basis every year.
• Compare MYGAs to Mississippi bank CDs explicitly on after-tax terms: A CD at 4.50% in Mississippi generates taxable interest each year that reduces your effective return. A MYGA at 5.00% defers all growth – and when you withdraw, Mississippi owes zero state tax. The MYGA advantage is real and compounding.
• Use an independent broker to shop the market: Independent brokers compare rates from 20+ carriers rated A- or better. Some national carriers are not licensed in Mississippi, so the field of available products varies – a broker who knows the state can identify who offers the best rates with Mississippi approval.
• Keep individual carrier exposure under $250,000: The Mississippi guaranty fund covers $250,000 per carrier. For larger investments, divide across multiple insurers rated A- or better.
• Use the 10-day free-look: Mississippi requires a 10-day free-look period. Review the full surrender charge schedule and free-withdrawal provisions before the window closes.