Today’s Annuity Rates in Virginia
Virginia checks several important boxes for retirees evaluating fixed annuities: a higher-than-average guaranty fund limit of $350,000, a $12,000 age deduction for residents 65 and older, and no state tax on Social Security benefits. For someone coordinating multiple income streams in retirement, those features work well together.
Richard, 63, is retiring as a Northern Virginia federal contractor with $350,000 in a TSP rollover. His options include rolling the TSP into an IRA and then purchasing a fixed annuity, a common move among federal employees who want guaranteed rates without market exposure. Virginia’s $350,000 guaranty limit means his entire deposit falls within coverage from a single carrier.
Below, you’ll find the current fixed annuity rates available to Virginia residents, how the state’s premium tax affects those rates, and what Virginia’s age deduction means for your after-tax income in retirement.
Best Annuity Rates in Virginia: 2026 Rate Table
The rates below are from A-rated carriers available to Virginia residents as of March 2026. A multi-year guaranteed annuity (MYGA) locks in the rate shown for the full term, no annual adjustments, no participation rate calculations.
| Term | Top Rate (A-rated) | Typical Range |
|---|---|---|
| 3-Year Fixed Annuity | 5.30% | 4.60%–5.30% |
| 5-Year Fixed Annuity | 5.60% | 4.80%–5.60% |
| 7-Year Fixed Annuity | 5.75% | 4.90%–5.75% |
| 10-Year Fixed Annuity | 5.65% | 4.85%–5.65% |
Rates from A-rated carriers as of March 2026. See live rate table →
On a $350,000 deposit at 5.60% for five years, the total guaranteed interest earned is approximately $108,290. At Virginia’s 5.75% bracket, the state tax on those gains at distribution is roughly $6,200, but the $12,000 age deduction (at 65+) helps offset that meaningfully.
How Virginia Regulations Affect Your Annuity Rate
Virginia’s premium tax on annuity deposits is 2.25%, on the higher end of the national range. This is factored into carrier pricing, so all else being equal, Virginia residents may see rates very slightly lower than in premium-tax-friendly states like Arizona (1.83%). The difference is typically a few basis points, not percentage points.
Annuity sales in Virginia are regulated by the Bureau of Insurance, which operates under the State Corporation Commission (SCC), an unusual structure for an insurance regulator, but one with a long track record. Virginia has adopted the NAIC best-interest standard, requiring agents to prioritize your financial interest when recommending a product.
Virginia’s standard free look period is 10 days. This applies to new contracts delivered to the owner, if you don’t receive it in person, the clock typically starts when the contract arrives in the mail. Review every number against your illustration before the period expires.
Virginia Life, Accident and Sickness Insurance Guaranty Association: What It Covers
Virginia’s guaranty association protects annuity owners up to $350,000 per person, per insurer. That’s $100,000 above the more common $250,000 floor seen in states like Arizona and Massachusetts, and one of the higher limits in the Mid-Atlantic region.
The coverage applies to the present value of your annuity contract in the event of insurer insolvency. Virginia’s association is funded by assessments on all licensed insurers doing business in the state, not by government appropriation. More background on how these state safety nets function is available at our state guaranty associations guide.
Richard’s situation illustrates the benefit: With $350,000 in a single fixed annuity, he is exactly at Virginia’s coverage ceiling. If his carrier were to fail, a remote but not impossible event, the full $350,000 would be protected. Had he been in a $250,000-limit state like Massachusetts, $100,000 would be unprotected. Virginia’s higher limit makes single-carrier deposits more manageable for mid-to-large investors.
If you’re depositing above $350,000, the split-carrier approach still applies. A $500,000 deposit, for example, might be split $300,000 and $200,000 across two carriers, keeping both well within Virginia’s limit.
Annuity Tax Treatment in Virginia
Virginia taxes ordinary income on a graduated scale: 2% on the first $3,000, 3% on $3,001–$5,000, 5% on $5,001–$17,000, and 5.75% on income above $17,000. For most retirees with meaningful annuity income, the relevant rate is 5.75%.
Virginia residents age 65 and older receive a $12,000 Age Deduction on retirement income, including annuity distributions. This deduction phases out for higher-income taxpayers: it begins reducing at $50,000 of income for single filers ($75,000 for married filing jointly) and disappears entirely at $75,000 single / $100,000 joint. Below those thresholds, the full $12,000 deduction applies.
For Richard, 63, the deduction isn’t available yet, but once he turns 65, his first $12,000 in annual annuity income is effectively sheltered from Virginia state tax. On a $30,000 distribution, only $18,000 is taxable at the state level. At 5.75%, that’s a tax of $1,035 instead of $1,725, a $690 annual difference that adds up over a decade of withdrawals.
Virginia does not tax Social Security benefits. For retirees drawing both Social Security and annuity income, this means a significant portion of total retirement income remains untaxed at the state level. Qualified retirement account distributions, including from an IRA-held annuity, are taxed as ordinary income but are eligible for the age deduction.
How to Buy an Annuity in Virginia: Step by Step
- Evaluate your rollover options first. Virginia has a large federal employee and military retiree population. If you’re rolling a TSP, 403(b), or pension lump sum into an annuity, confirm the rollover is structured as a direct transfer (trustee-to-trustee) to avoid the 20% mandatory withholding on indirect rollovers. Your HR department or plan administrator can initiate a direct rollover to an IRA, which then purchases the annuity.
- Compare rates across A-rated carriers. Virginia residents have access to most major carriers. Review our live rate table filtered by term length. A 5-year MYGA is the most popular term among pre-retirees who want to lock in today’s rates and reassess at maturity.
- Request a free illustration and quote. Ask for a side-by-side comparison of 3-, 5-, and 7-year products. Get a free quote that includes the full surrender charge schedule, any annual free withdrawal provision, and the credited interest breakdown year by year.
- Work with a Virginia-licensed agent. Virginia’s Bureau of Insurance maintains a public license lookup. Confirm your agent holds a current life and health license. Any agent recommending you replace an existing annuity must provide a replacement disclosure form under Virginia law.
- Review the contract during your free look period. You have 10 days. Confirm the rate, the surrender charge years, and your beneficiary designation. Virginia does not require a notarized signature for standard individual annuity contracts, but keep a copy of your signed application for your records.
For a detailed walkthrough of the full purchase process, see our guide on how to buy an annuity.
Frequently Asked Questions About Annuities in Virginia
What is Virginia’s annuity guaranty fund coverage limit?
The Virginia Life, Accident and Sickness Insurance Guaranty Association covers annuity owners up to $350,000 per person, per insurer. This is above the national median and one of the higher limits in the Mid-Atlantic region. Deposits up to $350,000 with a single A-rated carrier are fully covered in the event of insolvency.
Does Virginia tax Social Security benefits?
No. Virginia exempts Social Security benefits from state income tax entirely. This is a meaningful advantage for retirees who are combining Social Security with annuity income, since only the annuity distributions (above the $12,000 age deduction) are subject to Virginia’s graduated income tax.
How does Virginia’s $12,000 Age Deduction work for annuity income?
Virginia residents age 65 and older can deduct up to $12,000 of retirement income, including annuity distributions, from their Virginia taxable income each year. The deduction phases out for single filers with income above $50,000 and disappears at $75,000. For retirees below those thresholds, the deduction reduces annual state tax on annuity withdrawals by up to $690 per year at Virginia’s 5.75% top rate.
Can a federal employee roll a TSP into a fixed annuity in Virginia?
Yes. A TSP can be rolled into a traditional IRA via a direct trustee-to-trustee transfer, and that IRA can then purchase a fixed or MYGA annuity. The key is using a direct rollover, if you take a distribution yourself and redeposit within 60 days, the TSP withholds 20% for federal taxes (which you’d recover at filing, but it creates a timing issue). Virginia follows federal rollover rules, so a clean direct transfer triggers no immediate tax. See our MYGA guide for how these products are commonly structured inside IRAs.
