Best Annuity Rates in Nebraska (2026)

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Nebraska is in the middle of a multi-year tax transformation. Significant income tax cuts passed in recent years are reducing the state’s top marginal rate substantially through 2027 – and a full Social Security income tax exemption is being phased in through 2025. For annuity buyers, that means the tax picture is improving year over year. Fixed annuities from A-rated carriers provide guaranteed, tax-deferred growth in a state where retirees are increasingly keeping more of what they earn.

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

Are Fixed Annuities a Good Choice in Nebraska?

Nebraska’s ongoing tax reform has made the state increasingly favorable for retirees over the past three years. Lower income tax rates and the Social Security exemption mean annuity withdrawals face a lighter state tax burden than they did five years ago. For retirees building guaranteed income from savings, a MYGA at current rates provides both the growth certainty and tax-deferral advantage that bank CDs cannot match.

Consider Susan, age 66, in Omaha. She has $175,000 in a 12-month CD at 4.00%. She moves it into a 5-year MYGA at 5.25%. At maturity, her account reaches approximately $225,836 – a guaranteed gain of $50,836 with no market risk. Because Nebraska’s income tax rate has been reduced and Social Security is now exempt from state tax, Susan’s effective state tax on annuity withdrawals is meaningfully lower than it would have been in 2021. The five-year deferral compounds this advantage – no annual 1099 interest, no annual state tax bite on growth until she actually withdraws.

Nebraska repealed its estate tax in 2023. However, Nebraska still has an inheritance tax on certain classes of beneficiaries – specifically non-lineal heirs (siblings, cousins, unrelated parties) face inheritance taxes ranging from 1% to 15%. Surviving spouses and children are exempt. Named annuity beneficiaries who are direct heirs receive the contract value outside of probate and generally exempt from Nebraska inheritance tax.

Nebraska Guaranty Association: How Your Annuity Is Protected

The Nebraska Life and Health Insurance Guaranty Association protects Nebraska policyholders if a licensed insurer becomes insolvent. Coverage is automatic – no enrollment and no additional fee.

For investments over $250,000, divide funds across multiple A-rated carriers. Each insurer has its own separate $250,000 protection limit.

Nebraska Life and Health Insurance Guaranty Association
Website: nebraskaga.org

How Nebraska Taxes Annuity Income

Nebraska taxes annuity withdrawals as ordinary income at the state’s reduced rates. As of 2026, Nebraska’s top income tax rate has been reduced to approximately 3.99% for most filers. Social Security income is fully exempt from Nebraska state income tax as of 2025.

Nebraska’s tax cuts are scheduled to continue through 2027, so the top rate will decline further in future years. For long-term annuity buyers, this means the state tax burden on withdrawals will be lower at the end of a 5- to 10-year term than it is today. Withdrawals before age 59½ trigger the 10% federal early withdrawal penalty in addition to ordinary income tax at both federal and Nebraska state rates.

Nebraska Department of Insurance

The Nebraska Department of Insurance licenses and regulates all insurance carriers and agents operating in Nebraska. Verify that your carrier and agent are licensed in Nebraska before purchasing any annuity.

Tips for Buying an Annuity in Nebraska

• Lock in a long MYGA term now to capture current rates: Nebraska’s tax rates are declining through 2027, but so might national MYGA rates if the Fed shifts policy. Locking in a 5- or 7-year MYGA at today’s rates captures both current high yields and a declining state tax environment on eventual withdrawals.
• Understand inheritance tax implications for non-lineal heirs: If you plan to name a sibling, niece, nephew, or unrelated party as your annuity beneficiary, Nebraska inheritance tax may apply to the proceeds. Consult an estate planning attorney if this affects your beneficiary designations.
• Use an independent broker to compare A-rated carriers: Not every national carrier is licensed in Nebraska. An independent broker with Nebraska experience can identify which carriers offer the best rates in the state.
• Keep individual carrier exposure under $250,000: For larger portfolios, spread investments across multiple A-rated insurers to stay within the guaranty fund limit at each carrier.
• Use the 10-day free-look period fully: Nebraska requires 10 days. Review the entire contract – particularly the surrender charge schedule, the annual free-withdrawal amount, and the rate guarantee terms – before the free-look window closes.