Understanding the Annuity Accumulation Periods

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

What is the Accumulation Period in Annuities?

The accumulation period in annuities is the phase during which you pay money into the annuity. This period can span several years. During this time, the money you contribute is invested and grows tax-deferred.

How Long Is Accumulation Period For Immediate Annuities

How Does the Accumulation Period Work?

  1. Contributions: You make payments into the annuity. These can be lump-sum payments or regular contributions.
  2. Investment Growth: The money in the annuity is invested, often in stocks, bonds, or mutual funds.
  3. Tax-Deferred Growth: The investment grows without being taxed until you withdraw the funds.
Annuity Accumulation Period

Examples of Accumulation Period Benefits

Accumulation Period For Immediate Annuities


Understanding the annuity accumulation period helps in effective financial planning for future needs like retirement. It’s a phase where your investments grow tax-deferred, enhancing the potential for a more secure financial future. Contact us today for a free quote.

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Accumulation Period

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Frequently Asked Questions

What is the difference between the accumulation period and the annuity period?

The accumulation period of an annuity refers to the duration you pay the insurance company. In the case of lump sum funding of an annuity, the accumulation period includes when the annuity is appreciating.

How long is the accumulation period for immediate annuities?

Immediate annuities don’t have an accumulation period. They are designed for immediate income, meaning payouts to the annuitant start shortly after a single lump-sum payment is made to purchase the annuity, often within 12 months.

What happens if the annuitant dies during the accumulation period?

If the annuitant dies during the accumulation period of an annuity, the contract typically specifies that a designated beneficiary will receive the annuitant’s contributions plus any earned interest or investment gains. The exact amount and payment method depend on the annuity contract terms. Some contracts may offer options such as a lump-sum payment or continuing the investment for a specified period. It is essential to review your annuity’s specific provisions and discuss them with your financial advisor to understand the implications for your beneficiaries.

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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