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Babe Ruth, The Great Depression & Annuities

11/23/2019

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Babe Ruth is arguably the greatest major league baseball player of all time.  Babe was such a draw for the New York Yankees that the Yankees made Babe the highest paid player in baseball in 1922, at a salary of $52,000 per year. 

The Babe spent the early part of the roaring 20’s blowing through his prodigious salary.  Babe was well on his way to going down in history as one of the many athletes who lived lavishly but spent their retirement in bankruptcy.  The history of sports is littered with former greats losing it all such as Johnny Unitas, Scottie Pippen, Dorthy Hamill, Evander Holyfield, and most famously Mike Tyson, who squandered away earnings in excess of $300,000,000. 

At the urging of his business manager, Babe met with future Hall of Famer, Harry Heilman, of the Detroit Tigers in October of 1923.  Harry Heilman worked in the off-season as an insurance agent for The Equitable.  Babe purchased a deferred annuity from Harry with his World Series winnings and a portion of his annual salary.  Babe continued to make additional annuity purchases through 1930.

When Babe began making his annuity purchases, he had no idea the roaring 20’s would come to a crashing halt with The Great Depression beginning in 1929, and he had no idea that his playing days were numbered.  Babe was forced to retire from baseball during the 1935 season as he was no longer able to physically withstand the toll the game took on his body. 

Once the highest paid player in baseball, Babe was now unemployed during the heart of The Great Depression. 

But, due to the planning Babe and Harry Heilman had done previously, Babe was able to begin receiving payments starting in 1934 of over  $17,500 a year in annuity payments.  $17,500 a year in 1934 is the inflation adjusted equivalent of $290,578.22 in today’s dollars. 

While other athletes and celebrities of the time found themselves in bread lines and destitute, The Babe lived comfortably in retirement, never having to worry about running out of money. 

The Babe was so impressed with the power of annuities in creating financial security that he directed his estate to purchase a lifetime payment annuity for his wife at his death so she would always be taken care of.

While the Babe can’t teach any of us to hit home runs in the manner he did, he left behind a lesson that all can benefit from.  With wise planning and using the safety of annuities, one can retire with security no matter what happens in stock markets.

*** from AnnuityReserve.com, April 27, 2012***

http://annuityreserve.com/blog/?p=70
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  • Home
  • VIDEOS
    • Retirement Planning >
      • Annuity Explanation
      • Home Equity Transfer
      • Monetary Devaluation
      • Pension Maximization
      • Retirement Income Risk
      • Retirement Insurance
      • Retirement Questions
      • Retirement Savings Risk
      • Retirement Tax Strategy
      • Reverse Mortgage (HECM)
      • Roth Conversion
      • Safe Money Contracts
      • Social Security
      • Tax Free Retirement
      • Taxes, Risk & Fees
    • Fixed Annuities >
      • Annuity Buckets
      • Annuity Exchange
      • Annuity Laddering
      • CD to Annuity
      • FIA Credit Rate Explanation
      • FIA Decision Assurance
      • FIA Hedging Explanation
      • FIA Reset Explanation
      • Guaranteed Income Rider
      • IRA Annuity
      • Income Annuity (SPIA)
      • Indexed Annuity
      • LTC Annuity
      • Longevity Annuity
      • Multi Year Guarantee Annuity (MYGA)
      • QLAC Annuity
      • Split Annuity
      • TSP Annuity
    • Estate Planning >
      • CRT / ART
      • Cash Reserve Asset Class
      • Estate Life Insurance
      • Estate Planning
      • Estate Tax Insurance Trust
      • Estate Taxation
      • Final Expense
      • LTC Life
      • Life Settlement
      • Living Trust
      • Planned Giving
      • RMD Conversion
      • Single Premium Life
      • Special Needs Trust
      • Split Dollar Family Banking
    • Life Insurance >
      • Cash Value Life Insurance
      • Child Savings Bank
      • College Funding
      • Family Life Insurance
      • IUL Credit Rate Explanation
      • IUL Decision Assurance
      • IUL Hedging Explanation
      • IUL Reset Explanation
      • IUL Retirement Plan
      • Index UL
      • Life Insurance Calculation
      • Lifetime Tax Strategy
      • Living Benefits
      • Mortgage Life Insurance
      • Private Equity Banking
      • Term/UL Conversion
      • WL Retirement Plan
      • Whole Life Dividends
  • Create A "Private Pension"
  • The Annuity Truth
  • Blog
  • About
  • Contact