Accumulation Period

Filed Under » , ,
Dictionary Says

Definition of 'Accumulation Period'

1. The phase in an investor's life when he/she builds up his/her savings and the value of his/her investment portfolio with the intention of having a nest egg for retirement.

2. In the context of a deferred annuity, the period of time when the annuitant is making contributions to the annuity and building up the value of his/her annuity account. This is usually followed by the annuitization phase, when guaranteed payments are paid out to the annuitant for a specified period of time (usually the rest of his/her life).
Investopedia Says

Investopedia explains 'Accumulation Period'

1. By choosing to defer spending until later in life, individuals create savings that can be invested in the marketplace and therefore grow over time. If they periodically invest money over the duration of their working lives, individuals can create a very lengthy accumulation period during which their savings can grow to substantial proportions.

2. In a deferred annuity, the greater your contributions are during the accumulation period (and the longer the accumulation period is), the greater your income stream will be once you begin the annuitization phase.

Related Definitions

  •

    Accumulation Plan

    1. A general financial strategy in which an investor attempts to build the value of his or her portfolio to a desired size.2. In the context of mutual funds, a formal arrangement in ...
    Read More »

  • Deferred Annuity

    A type of annuity contract that delays payments of income, installments or a lump sum until the investor elects to receive them. This type of annuity has two main phases, the savings ...
    Read More »

  • Annuity Contract

    The written agreement between an insurance company and a customer outlining each party's obligations in an annuity coverage agreement. This document will include the specific details of ...
    Read More »

    • Compounding

      The ability of an asset to generate earnings, which are then reinvested in order to generate their own earnings. In other words, compounding refers to generating earnings from previous ...
      Read More »

    • Rule Of 72

      A rule stating that in order to find the number of years required to double your money at a given interest rate, you divide the compound return into 72. The result is the approximate ...
      Read More »

    • Savings

      According to Keynesian economics, the amount left over when the cost of a person's consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given ...
      Read More »

    • Nest Egg

      A special sum of money saved or invested for one specific future purpose.
      Read More »

    • Annuitant

      1. A person who receives the benefits of an annuity or pension.2. The person upon whom a life-insurance contract is based.
      Read More »

    • Annuitization Phase

      The period when the annuitant starts to receive payments from the annuity. This period is after the accumulation phase where money is invested into the annuity.
      Read More »

    • Pay Yourself First

      A phrase commonly used in personal finance and retirement planning literature that means to automatically route your specified savings contribution from each paycheck at the time it is ...
      Read More »

Articles Of Interest

Sponsored links
Hot Definitions
Partner Links
Suggested Definitions