What is the term for the time period during which an annuitant contributes to an annuity?

The time period during which an annuitant contributes to an annuity is referred to as the accumulation period. During this phase, the annuitant makes payments into the annuity, which can grow on a tax-deferred basis. This means that any earnings generated from the invested funds are not taxed until they are withdrawn, providing a significant advantage for long-term savings and retirement planning. The accumulation period can vary in duration depending on the specific terms of the annuity contract and the financial goals of the annuitant.

Understanding the accumulation period is crucial because it sets the stage for the subsequent distribution phase, where the annuitant starts receiving payouts from the annuity. This distinction is essential in the context of retirement planning, as the accumulation phase is key for building up the necessary funds that will be accessible during retirement.