In a tax-deferred annuity, earnings grow until retirement. Which phase is described?

• A. Payout period
• B. Maturity period
• C. Accumulation period
• D. Distribution period

Answer: (C)

The phase being described is the period when funds are built up and grow without taxes being paid on the earnings until retirement. In a tax-deferred annuity, you contribute and the account earns interest or investment gains, and those earnings accumulate tax-deferred until you begin withdrawals. That growth-focused phase is the accumulation period. Once you start receiving payments in retirement, that’s the payout or distribution phase, where taxes are paid on the amounts withdrawn. The term often isn’t used for a separate “maturity” phase in this context.