Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in?

The annuity being described is in the accumulation period. During this phase, the annuity owner makes contributions, and the invested funds grow on a tax-deferred basis, meaning that taxes on the growth are not due until withdrawals are made, typically upon retirement. This phase is characterized by the investment of money into the annuity and the compounding of interest or earnings over time. It allows for significant growth, as the earnings can also earn interest, enhancing the overall value of the annuity before any distributions begin.

Once Kathy retires and begins to take withdrawals from her annuity, she will enter the distribution phase. Other terms like investment period or withdrawal phase are less commonly used when discussing annuities, and they do not specifically define the tax-deferred growth aspect in the same way the accumulation period does. Thus, the accumulation period accurately describes the stage the annuity is in before Kathy starts receiving distributions.