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Founding father Benjamin Franklin was a true American innovator. Always one for experimentation and forward thinking, Franklin helped discover electricity, invented bifocals, and established the first American public library. 1, 2 His interests were varied, and Franklin also knew a lot about managing his finances. Specifically, he saw the value and financial benefits of deferred income payments to help his money last for generations to come. In Franklin’s will, he left the cities of Boston and Philadelphia what were essentially annuities that amounted to a total of $2,000 sterling, or roughly $4,500 at that time (1700s).3 Due to compounding interest, the investment trusts flourished and by 1990, the remaining investments had grown to $4.5 million for Boston and $2 million for Philadelphia, due to each city’s investment strategies. Today, a portion of that money remains to carry out the wishes stipulated in Franklin’s will.4

In an inventive strategy, Franklin required that a large portion of the money could not be distributed for 100 years, and some of the money was specifically intended to be distributed 200 years after Franklin’s passing. Franklin’s bequest was structured in a way that many people today use in their retirement planning in the form of a guaranteed income annuity.

A guaranteed income annuity generates a stream of income paid out for life. One’s age, gender, premium amount, and chosen payout option determines the amount of income an individual receives. Guaranteed income annuities have become especially important for retirees because Americans must prepare for a retirement that could last 20, 30 or even 40 years due to increased longevity*. It’s no surprise that Franklin was ahead of his time with the idea of deferred income payments. He was always thinking about the future.

Guaranteed income annuities have become especially important for retirees because Americans must prepare for a retirement that could last 20, 30 or even 40 years due to increased longevity*.

In addition to living longer, Americans are facing the reality that traditional pensions are disappearing.  According to the Bureau of Labor Statistics, only 18 percent of private industry employees were offered a traditional pension in 2017. 5When thinking about these and other retirement risks, Americans need to adequately prepare to create a financially secure retirement. It’s astonishing to think that Franklin was taking this measured approach way back in the 1700’s.

Looking back more than two centuries later, Franklin’s foresight and fiscal acumen was rather remarkable. While he may have thought he was simply extending his legacy for future generations by leaving deferred income payments in his will, Franklin will forever be a retirement revolutionary. 

Go back to our newsroom to read more stories.

Media contact
Jacqueline Meere
New York Life Insurance Company
(212) 576-5301

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*All guarantees are backed by the claims-paying ability of the issuer.    


1.     http://www.ushistory.org/franklin/science

2.     http://www.ushistory.org/franklin/philadelphia/library.htm

3.     (http://www.nytimes.com/1990/04/21/us/from-ben-franklin-a-gift-that-s-worth-two-fights.html)

4.     https://www.nytimes.com/paidpost/franklin-templeton/investing-in-the-future-200-years-in-the-past.html

5.     Pensions Are Disappearing, Here’s How to Save for Retirment, Jordan Wathan, June 5, 2018, themotleyfool.com

6.     https://www.newyorklife.com/articles/deferred-income-annuities/