Glossary

Deferred annuity

An annuity where payments begin at a chosen future date rather than immediately.

A deferred annuity separates the buying from the paying. You contribute now, the money accumulates until a date you set, and the income begins then.

The period before payments start is the deferment period. An immediate annuity, by contrast, begins paying shortly after purchase.

Related terms

  • Annuity A contract that converts a lump sum into an income, paid for life or for a set period.
  • Vesting The date a deferred pension converts from accumulation into income.
  • Longevity risk The risk of outliving your savings.

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