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Accumulation Phase (Period) - 401k Retirement Glossary Accumulation phase or accumulation period is the time in an investor's life when he/she works hard to build up retirement savings in his investment portfolio in order to have a financially secure retirement. Accumulation phase can also mean the building up of annuity payments every period (monthly, quarterly, semi-annually or annually) over many years in order to have a good amount of money saved up (e.g upon retirement). After retirement or a big event in the annuity payer's life, he can cash out by receiving monthly annuity payments from his deferred annuity plan. How Deferred Annuity Plans Work Some investors contribute a certain amount of their paycheck every month towards a deferred annuity plan thus building up compounding interest and the value of their savings. If they do this over a 20 year period for example, this is known as an accumulation period. The more money you contribute towards a deferred annuity plan, the more money you will have upon the annuinization phase (the phase when you start to withdraw money monthly from your plan). |