“I may take risks in life, but I will never risk my money, I use annuities, and I never have to worry about my money.” – Babe Ruth.
Annuities have been a powerful financial tool used by individuals from various walks of life. These financial instruments, usually associated with retirement income planning, have a lengthy history of being used by notable figures to secure their financial future and support philanthropic endeavors. Let’s delve into the stories of several prominent personalities who have leveraged annuities.
Firstly, we look at Benjamin Franklin, one of America’s founding fathers. Franklin was an ardent advocate of annuities, so much so that he included them in his last will and testament. Upon his death in 1790, Franklin bequeathed £1,000 each to the cities of Boston and Philadelphia. The terms of his will stipulated that these funds be used to create annuities that would fund public works projects. His forward-thinking gesture resulted in significant public works improvements and financial growth for both cities, illustrating the long-term power of annuities.
Next is Babe Ruth, the legendary baseball player. Known for his phenomenal home runs and larger-than-life persona, Ruth made winning decisions off the field, notably with annuities. Ruth purchased an annuity to ensure a steady stream of income during retirement. His foresight allowed him to maintain his lifestyle long after his sporting career ended, even amidst the Great Depression, showcasing the value of annuities as a safeguard against uncertain economic times.
One of the wealthiest women of the 20th century, Hettie Green, also embraced annuities. Known for her frugality, Green capitalized on the stability provided by annuities, helping her amass a fortune that would be worth billions in today’s dollars. Through her investments in annuities, she ensured her wealth was preserved and grew steadily, demonstrating annuities’ effectiveness in wealth accumulation and preservation.
Renowned physicist Albert Einstein also used annuities. He purchased an annuity from Equitable Life Assurance Society in 1950, with his wife, Elsa, as the beneficiary. The annuity provided a financial safety net for Elsa and, after Einstein’s passing, helped maintain her lifestyle. Besides being an excellent tool for estate planning, according to some claims, Einstein called compound interest the “8th Wonder of the World.” A deferred annuity is an investment vehicle that can benefit significantly from this power of compound interest. You pay premiums over a period of time, with the money accumulating and earning compound interest until you decide to start withdrawing. The compound interest is calculated periodically on the initial premium and the already earned interest. Importantly, taxes are only paid once you begin withdrawing, allowing the money to grow at an accelerated pace, especially over more extended periods.
Finally, the story of Oseola McCarty is a powerful testament to the philanthropic use of annuities. McCarty, a washerwoman from Mississippi, saved every penny she earned, much of which was invested in annuities. Upon her death in 1999, she left a significant portion of her savings, more than $150,000, to the University of Southern Mississippi. McCarty’s story underscores the power of annuities in transforming even modest savings into substantial legacies.
In summary, these notable figures from different backgrounds and eras have effectively used annuities to secure their financial futures and leave lasting legacies. Whether it was Franklin’s philanthropic efforts, Ruth’s and Green’s financial security, Einstein’s estate planning, or McCarty’s charitable bequest, annuities played a crucial role. Their stories are vivid examples of annuities’ practical utility and long-term benefits. Whether you are a sports icon, a science genius, or an everyday individual, annuities can be a powerful tool in financial and legacy planning.
- Annuities have been effectively utilized by notable figures from different eras and backgrounds for financial planning and wealth preservation. These figures include Benjamin Franklin, Babe Ruth, Hettie Green, Albert Einstein, and Oseola McCarty.
- Annuities provide a long-term strategy for accumulating wealth, securing a steady income stream during uncertain times (such as 0retirement or economic downturns), and creating a financial safety net for beneficiaries.
- Annuities can also serve philanthropic goals by transforming even modest savings into substantial legacies, as seen in the cases of Benjamin Franklin and Oseola McCarty.
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