Retirement Planning, During Your Playing Career

Professional Athlete Retirement Planning


Athletes of All Sports Need to Consider Retirement Planning

Too often professional athletes rise to stardom and begin spending in a way that doesn’t consider sustaining wealth during retirement. This could be the result of many factors, including players not being financially educated, working with poor investment planners, or simply ignoring the fact that there is life after the game is over. As humans we tend to have an incredible preference for fulfilling our current needs, meaning we are willing to defer future satisfaction for current pleasure. Some professional athletes, get their hands on a big rookie deal and react by spending excessively. Their lives have suddenly transformed from college student-athletes to rich professional athletes.


Below we  discuss how athletes can manage their post-career finances through retirement plans, in place to allow athletes to plan for their future from the day of their first paycheck. In American sports, there isn’t one common retirement plan, rather each professional sport has a system that best fits their league. We have outlined the plans for the United States’ four major sports leagues below:

  • NBA – offers both a pension plan and 401(k), where the pension allows you to begin drawing when you reach age 50. Although if you wait until age 62, the minimum annual benefit would rise from approximately $19k to $60k, even if you were only on an NBA roster for 3 years. If you played for 10 years or more, the annual benefit is $200k. In terms of the 401(k), the allowed team contributions are higher than player deferrals.


  • MLB – offers a pension plan only. Players are vested after 10 season in the league, and receive an annual benefit of $200k. Athletes who played in the MLB for less than 10 years will receive a smaller annual payment.


  • NFL – offers a pension, 401(k), as well as an annuity Benefits from the pension are calculated on a year-by-year basis, with the pension for a 5-year veteran aged 55 starting at $28k. In terms of the 401(k), teams contribute double what the player defers to this plan, as long as the player has been in the league for 2 seasons prior to starting the 401(k). There is extra incentive for those who make it past four seasons in the league, which includes the option for an annuity.
  • NHL – offers only a pension plan . In 1986 the league began calling this plan a “defined contribution” pension. The full retirement benefits can be drawn as early as age 45. In the NHL, players automatically enter this plan after playing just one game.


The window for professional athletes to make their money is very small. Even if a player were to compete for 15 years (which is much longer than the average), the earning years are still dramatically less as compared to a traditional career that can span 30-40 years or more. Sonya Stinson says it best, “You might not think pro athletes earning millions would have to worry about the risk of outliving their retirement savings. But when you consider their retirement could conceivably stretch 50 years or more, that risk isn’t so far-fetched.”

Check out Monarch wealth planning for more information on retirement, and find a solution that works for you.