• Question
  • Initial investment amount of the Annuity

    Asked by someone from Fremont, CA on 4/10/2016

    1) What does the initial investment in the Annuity calculator mean? Do I have to pay the full amount at the beginning of the program or I can pay an installment plan in 5 years or 10 years?
    2) I have concern of loosing my investment in case the insurance company goes bankrupt in 10 or 20 years. Please advise.

  • Categories: How to Choose, Annuities


  • Steve 


    San Francisco, CA

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  • The initial investment is what the calculator is assuming you are putting in upfront today. If you wanted a deferred annuity there are probably options to invest over time, but you would have to get quotes from individual carriers.

    You're smart to consider the risk of default by an individual insurance company - some of the ways to hedge that risk are:
    - check the credit rating of the insurance company
    - use multiple insurance companies - so invest in more than one annuity

    You can learn more about annuities here: http://www.newretirement.com/Services/Annuities.aspx

    It's worth talking with a fee only financial advisor who has a fiduciary relationship with you (so they act in your best interest) when considering big decisions like this. You can reach out to a financial advisor here - just make sure to ask about their fee structure and if they will act as your fiduciary: https://www.newretirement.com/free-retirement-consultation.aspx

  • Login to rate this answer:   Answered on 4/11/2016
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.