If you are renewing an existing annual pass, it just remains active for another year from the expiration date, whether you use it immediately or not. If you don't plan on using the AP for a while after it expires and/or need the AP for dates later in the next year then you'd want to allow your existing AP to expire, then buy a NEW AP to activate the next time you go.
Example: Annual Pass expires on 2/1/20. I am not going to the parks again until May 2020 and have another trip planned in March 2021.
If I renew my AP, my new expiration date will be 2/1/21 and I will have to renew again to cover my March 2021 trip.
If I want an AP to cover both of my trips, I would let my current AP expire, then purchase a NEW AP (without the renewal discount) closer to my May trip. My new AP would expire in May 2021.