Accumulation Period

The accumulation period of an annuity is the phase where you are increasing the cash value of your annuity. After this period is over, your annuity will be either annuitized or cashed out.

Get a Quote From Annuity.org →
Christian Simmons, writer and researcher for RetireGuide
  • Written by
    Christian Simmons

    Christian Simmons

    Financial Writer

    Christian Simmons is a writer for RetireGuide and a member of the Association for Financial Counseling & Planning Education (AFCPE®). He covers Medicare and important retirement topics. Christian is a former winner of a Florida Society of News Editors journalism contest and has written professionally since 2016.

    Read More
  • Edited By
    Lee Williams
    Lee Williams, senior editor for RetireGuide.com

    Lee Williams

    Senior Financial Editor

    Lee Williams is a professional writer, editor and content strategist with 10 years of professional experience working for global and nationally recognized brands. He has contributed to Forbes, The Huffington Post, SUCCESS Magazine, AskMen.com, Electric Literature and The Wall Street Journal. His career also includes ghostwriting for Fortune 500 CEOs and published authors.

    Read More
  • Financially Reviewed By
    Ebony J. Howard, CPA
    Ebony J. Howard, CPA

    Ebony J. Howard, CPA

    Credentialed Tax Expert at Intuit

    Ebony J. Howard is a certified public accountant and freelance consultant with a background in accounting, personal finance, and income tax planning and preparation.  She specializes in analyzing financial information in the health care, banking and real estate sectors.

    Read More
  • Published: July 22, 2021
  • Updated: April 27, 2023
  • 3 min read time
  • This page features 4 Cited Research Articles
Fact Checked
Fact Checked

A qualified expert reviewed the content on this page to ensure it is factually accurate, meets current industry standards and helps readers achieve a better understanding of retirement topics.

Cite Us
How to Cite RetireGuide.com's Article

APA Simmons, C. (2023, April 27). Accumulation Period. RetireGuide.com. Retrieved April 21, 2024, from https://www.retireguide.com/annuities/payout/deferred/accumulation-period/

MLA Simmons, Christian. "Accumulation Period." RetireGuide.com, 27 Apr 2023, https://www.retireguide.com/annuities/payout/deferred/accumulation-period/.

Chicago Simmons, Christian. "Accumulation Period." RetireGuide.com. Last modified April 27, 2023. https://www.retireguide.com/annuities/payout/deferred/accumulation-period/.

Why Trust RetireGuide.com
Why You Can Trust Us

Content created by RetireGuide and sponsored by our partners.

Key Principles

RetireGuide’s mission is to provide seniors with resources that will help them reach important financial decisions that affect their retirement. Our goal is to arm our readers with knowledge that will lead to a healthy and financially sound retirement.

We’re dedicated to providing thoroughly researched annuity information that guides you toward making the best possible financial decisions for you and your family.

We partner with Senior Market Sales (SMS), a leader in the insurance industry with over 30 years of experience and a network of 66,000 independently licensed agents across the United States.

Our partnership with SMS (and Insuractive, the company’s consumer-facing branch) allows us to deliver expertly researched and reviewed content at no cost or obligation to all of our visitors. It also gives our visitors the opportunity to take the next step in their financial journey by requesting help from our partner through the phone numbers or forms provided on our website.

If a visitor chooses to inquire about an annuity or other financial product through SMS as a result of our research and accurate information, RetireGuide may receive compensation for connecting the visitor with SMS. The revenue we earn for helping visitors get the help they’re seeking makes RetireGuide stronger for our audiences.

The content and tools created by RetireGuide adhere to strict editorial guidelines to ensure quality and transparency.

Editorial Independence

While the experts from SMS are available to help you navigate various annuity options, RetireGuide retains complete editorial control over the information it publishes.

We operate independently from SMS, which allows the award-winning RetireGuide team to provide you with unbiased information.

Visitors can trust our inflexibility regarding our editorial autonomy. We do not allow our partnership to influence RetireGuide’s editorial content whatsoever.

What Is the Accumulation Period or Phase and Why Does It Matter?

An annuity is an opportunity for you to earn income and set savings over a long-term span. During the accumulation period, you build up your annuity by paying premiums to the insurance company.

This period can last years and provide plenty of time for the overall value of the annuity to build. Your annuity also collects interest over this span which can also increase its value.

There isn’t a set amount of time for the duration of an accumulation phase — it can vary depending on your specific annuity — but the longer the phase, the greater the worth of your annuity.

After the accumulation phase is over, you will either cash out your annuity or annuitize it. This is known as the payout phase since you begin to get money back from your annuity through several payout options.

It would be best if you typically did not plan to make withdrawals during the accumulation phase because this is when you build up the value of your annuity for later use. A withdrawal would be counterproductive.

If you are planning to purchase an annuity that will have an accumulation phase, consider the following:
  • Withdrawals will be limited
  • Accumulation phases are for long-term savings and income
STEP 1
STEP 2
STEP 3

How soon are you retiring?

STEP 1
STEP 2
STEP 3

What is your goal for purchasing an annuity?

Select all that apply

Learn About Top Annuity Products & Get a Free Quote

Find out how an annuity can offer you guaranteed monthly income throughout your retirement. Speak with one of our qualified financial professionals today to discover which of our industry-leading annuity products fits into your long-term financial strategy.

For fastest service, call now!

866-219-2282Call Now

Or fill out the form

STEP 1
STEP 2
STEP 3

What Types of Annuities Does This Impact?

According to Forbes, you can steadily add money to your account over time to increase its value in a deferred annuity, then eventually cash out or annuitize your annuity.

You will not have an accumulation phase if you have purchased an immediate annuity. In this type of annuity, your contributed money is immediately annuitized, resulting in you starting to receive payments right away.

Since your payments begin right away as you contribute money, there is no time or reason for an accumulation phase to occur. This also applies to deferred income annuities.

Last Modified: April 27, 2023
Christian Simmons, writer and researcher for RetireGuide
Christian Simmons Financial Writer
Christian Simmons is a writer for RetireGuide and a member of the Association for Financial Counseling & Planning Education (AFCPE®). He covers Medicare and important retirement topics for RetireGuide. His unique blend of business and writing backgrounds has equipped him to understand complex retirement topics and convey that information in an informed and easily digestible way.
  • Certified educator in personal finance
  • Bachelor’s degree in journalism from the University of Central Florida Burnett Honors College
  • Master’s degree in integrated business from the University of Central Florida
Edited By
Lee Williams, senior editor for RetireGuide.com
Lee Williams Senior Financial Editor
Financially Reviewed By
Ebony J. Howard, CPA
Ebony J. Howard, CPA Credentialed Tax Expert at Intuit

4 Cited Research Articles

  1. Rodeck, D. (2021, February 4) What is a Deferred Annuity? Retrieved from https://www.forbes.com/advisor/retirement/deferred-annuity/
  2. Rodeck, D. (2021, January 6). What is an Immediate Annuity? Retrieved from https://www.forbes.com/advisor/retirement/immediate-annuity/
  3. National Association of Insurance Commissioners. (2020, September 30) Annuities. Retrieved from https://content.naic.org/cipr-topics/annuities
  4. U.S. Securities and Exchange Commission. (n.d.). Variable Annuities. Retrieved from https://www.sec.gov/investor/pubs/sec-guide-to-variable-annuities.pdf