For all professional athletes, eventual retirement from professional sports is an inescapable reality. It comes with the need to adjust to an environment that is immensely different from the cutthroat sports world to which they are accustomed.

For nonathletes, retirement usually occurs after a long working career that has enabled them to foresee and plan for the likely demands and challenges of retirement. Pro athletes, by contrast, should strongly consider preparing for retirement from their sport at a much younger age, given their shorter career spans compared with those in the nonsport environment. In some cases, professional athletes may have their career spans shortened even further due to injury.

Despite these realities, many professional athletes are not preparing for their lives after sports. We can see in the media that often within a short duration after ending their professional careers, players are facing serious financial stress. One factor is fame: Receiving a sudden fortune can tempt the athlete to spend most of it quickly; and this tendency can be heightened by the sense of entitlement that often follows stardom.


A major factor here is a lack of financial literacy. The result is an inadequate understanding of how investments work, meaning a failure to understand what embodies realistic returns and sensible fees, as well as the financial advisor’s role. It is often the case that athletes delegate too much and oversee too little. Some are too dependent on others to not only make significant financial decisions, but also to pay routine bills.

Also common is the fact that sports stars tend to be drawn to tangible ventures like restaurants, car dealerships or new inventions. These kinds of investments may seem more glamorous for those used to living a luxurious lifestyle. But the downside is that interest in more dull and passive investments such as stocks and bonds becomes limited. It is not often the case that you see an athlete’s finances crumble because he or she invested too much in a portfolio of corporate bonds or in a stock market index fund.

Cultivating a culture of proactive planning toward retirement, therefore, is the first step in making sure that a pro athlete avoids financial ruin. A focus on planning is important in establishing a level of financial security during retirement.

Next, the goal should be to build a wealth-accumulation plan in partnership with a financial advisor. The advisor should not only have a fiduciary responsibility over the athlete’s finances, but serve as an objective guide through the professional athlete’s life, post-career.


Some crucial points for athletes to take into consideration upon retirement include:

1) Putting away as much money as possible from day one;

2) Implementing tax-efficient strategies into the financial plan, including the choice of a proper domicile for tax purposes and the allocation of tax deductions to earned income;

3) Taking a long-term perspective that considers amortization rates; and

4) Understanding how the advisor is being paid in order to be aware of any conflicts of interest.

The transition from playing to retirement can be a very emotional experience for athletes, and having to worry less about financial burdens during retirement can be a huge bonus. Having a well-equipped, knowledgeable and trustworthy advisor can be the means to a long, healthy and financially stable “postgame” life for professional athletes.