Accumulation period

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Accumulation Period

1. The period of time in which someone saves, especially for retirement. Generally speaking, the longer the accumulation period, the more one saves.

2. In annuities, the period of time in which one contributes to the annuity. Depending on the type of annuity, taxes may be deferred during the accumulation period. Generally speaking, the longer the accumulation period and the more one contributes to the annuity, the greater the resulting income stream.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Accumulation period.

The accumulation period refers to the time during which your retirement savings accumulate in a deferred annuity.

Because annuities are federal income tax deferred, all earnings are reinvested to increase the base on which future earnings accumulate, so you have the benefit of compounding.

When you buy a deferred fixed annuity contract, the company issuing the contract promises a fixed rate of return during the accumulation period regardless of whether market interest rates move up or down.

With a deferred variable annuity, the amount you accumulate depends on the performance of the investment alternatives, known as subaccounts or separate account funds, which you select from among those offered in the contract.

At the end of the accumulation period, you can choose to annuitize, agree to some other method of receiving income, or roll over your account value into an immediate annuity. The years in which you receive annuity income are sometimes called the distribution period.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
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Data relating to home range of moose during the accumulation period (calculated using the Home Range Tools for ArcGIS[R] version 1.1 with the Minimum Convex Polygon method), length of the moose track during the accumulation period, and the number of diurnal urinations were also collected from the GPS-collared moose, but insufficient sample sizes precluded their utilization in the analysis.
In this cases, no annual return tax is levied during the accumulation period ([[tau].sub.g] = 0), so the pension capital accrues by rate r each period: [V.sub.t] = (1 +r) * [V.sub.t-1].
Mutual funds--During the accumulation period, variable annuities offer investment options that are essentially the same as mutual funds.
Assuming a distribution period of 20 years, Figure 19.3 shows the effective annual compound after-tax and after-expense rates of return for the entire accumulation and distribution period and the number of years in the accumulation period (the crossover year) until the variable annuity would outperform (provide greater annual after-tax distributions than) the mutual fund.
Similar to LT, PTE is defined as pre-tax earnings multiplied by 1 minus the tax rate in year t-1 and deflated by price at the beginning of the return accumulation period. [X.sub.j] represents the jth fundamental signal that is included in the model.
Friday is the deadline for the reserve accumulation period.
Assets held in a variable annuity grow on a tax-deferred basis during the initial accumulation period, allowing money normally paid as current taxes to compound and grow.
As long as there will be sufficient time between the deferral and the eventual withdrawal of the funds (i.e., the accumulation period) for the deferred amount to exceed 115% of the amount that could be accumulated in a currently taxable account, there should be no limit on the amount to invest in a TDV.
Thus, an individual can set aside money during the working years, i.e., the accumulation period, and receive periodical sums after retirement, i.e., the withdrawal period or liquidation period.
The mortality risk charge guarantees that if the annuitant/ contract holder dies during the accumulation period, the designated beneficiary will receive the greater of the current market value of the annuity or the annuitant's investment in the contract (less any previous withdrawals).
During the accumulation period there is a small life insurance contract guaranteeing the principal for life regardless of investment results.
Q: Is the purchaser of a deferred variable annuity taxed on the annual growth of a deferred annuity during the accumulation period?