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• The annuity principal is the sum of money you use to buy an annuity and the base on which annuity earnings accumulate.

  If you're buying a deferred annuity, you may make a one-time - or single premium - purchase, or you may build your annuity principal with a series of regular or intermittent payments.

  For example, if you own an annuity in an employer-sponsored retirement plan, you add to your principal each time you defer some of your income into your account - typically every time you're paid.

  When you buy an immediate annuity, you commit your annuity principal as a lump sum, and that amount is one of the key factors that determines the amount of your annuity income.

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  Cite Definition for Annuity principal

  American Psychological Association (APA)

  Annuity principal. (n.d.). Yahoo Personal Finance Glossary. Retrieved May 28, 2023, from website: http://www.expertglossary.com/definition/annuity-principal.

  Chicago Manual of Style (CMS)

  Annuity principal. finance.yahoo.com. Yahoo Personal Finance Glossary. Yahoo Finance. http://www.expertglossary.com/definition/annuity-principal (accessed: May 28, 2023).

  Modern Language Association (MLA)

  "Annuity principal." Yahoo Personal Finance Glossary. Yahoo Finance. 28 May. 2023 http://www.expertglossary.com/definition/annuity-principal.

• Browse Related Terms: Account balance, Accumulation period, Accumulation unit, Annuitant, Annuitization, Annuitize, Annuity, Annuity principal, Deferred annuity, Fixed annuity, Hybrid annuity, Immediate annuity, Income annuity, Life expectancy, Lump-Sum Distribution, Minimum required distribution (MRD), Nonqualified annuity, Split-funded annuity, Systematic withdrawal, Variable annuity, Withdrawal