The phrase '年年有余' is formed by duplicating the character 年 (nián, meaning 'year') to create 年年, indicating 'every year' or 'year after year,' then combining it with 有 (yǒu, meaning 'to have') and 余 (yú, meaning 'surplus' or 'abundance'), resulting in a literal composition meaning 'every year have surplus,' which conveys the idea of continuous prosperity.