Workplace retirement plans for pro athletes
You might not think pro athletes earning millions would have to worry about the risk of outliving their retirement savings. But when you consider that their retirement could conceivably stretch 50 years or more, that risk isn't so far-fetched.
Even with the most popular major sports leagues offering such benefits as pensions and 401(k) plans with employer matches, an athlete's relatively short career could make it hard to save adequately using those plans alone.
"They're not going to be able to put away in qualified retirement plans enough money to live on," says Andre Mirkine, founding member of the Sports Financial Advisors Association and associate vice president of investments at Wells Fargo Advisors. (Qualified plans refer to those with tax advantages.)
"Then it's incumbent upon the advisers who advise them to try to convince them to save," he adds.
Sometimes, former athletes run out of retirement savings chasing after wild investment deals, says Pete D'Arruda, a Cary, North Carolina, financial planner who frequently advises athletes.
"Many athletes take a lot more risk than they should after their playing careers," D'Arruda says.
Players in these seven sports organizations, at least, have a formal employer-provided benefit plan to get them started. But data from players unions and collective bargaining agreements show that, when it comes to retirement security, the playing field is decidedly uneven.