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Money Smart Athlete Blog

Structuring Wealth in view of Sports Retirement

Being a young athlete, one could suggest that all you should care about is performing your best in the field – an utterly mistaken perception that can be the root of a financially unsuccessful life for professional athletes. At Money Smart Athlete, we say that financial planning and wealth management should be at the core of an athlete’s mind throughout their career. The average athlete has a career of about 10 years, depending on the sport they play, and assuming they’re not forced to involuntarily retire. This suggests that while you’re an athlete, you need to plan your wealth in a way that you’ll be able to continue living a comfortable lifestyle for the next 30-40 years to come. Sounds hard right? Fortunately, it’s not as hard as it might sound assuming you have a plan that will enable you to take the right actions, at the right time, in order to be financially covered for the rest of your life.

Establishing the Plan

At the very early stages of your career, even before you’ve signed your first contract, it’s important that you sit down with a competent financial advisor and set the parameters that will shape your sports retirement fund. The most important information that you need to form such a plan is the amount of years you expect to be earning income as an athlete. Once you estimate that, you will essentially know that for the next ten years -for example- you will need to generate income or invest your money so as to grant you financial freedom for the rest of your life. Together with your advisor, you will set up a retirement fund which will consist of both savings for retirement, as well as long-term investments that will be generating constant income for the rest of your life. It would be wrong to say that there is a fixed percentage that needs to go towards savings or investments because every athlete’s career is very different. Nevertheless, when you sit down with your financial advisor and share all the information regarding the expected timespan of your career, the value of your initial contract and your future plans, they can help you tailor a plan towards achieving a financially successful retirement.

Executing the Plan

Once you’ve established your plan of action together with your financial advisor, it’s up to you, the athlete, to diligently follow that plan. As a young athlete, especially at the peak of your career, you tend to believe that money will never be a problem just because they’re easy to get at that point in life. Good news is: professional athletes tend to make more money than the average worker throughout their career, but the money is more concentrated and it’s up to the athlete to spread them out throughout their lives. This is what makes the execution of your plan highly important. Every time athletes ignore the plan and spend extensively without accounting for retirement, they are essentially stealing from their future self and family. Sounds bad right? It is indeed as bad as it sounds, and it can even lead to bankrupt athletes and financially unsuccessful lives.

Plan B and involuntary retirement

As I mentioned initially, athletes, based on the sport they practice, have a certain amount of years during which they will generate income for the rest of their lives. What happens though when you find yourself forced to retire earlier than planned due to the circumstances? In simple words, what if you have a serious injury half-way into your career that prevents you from playing? What happens to your retirement plan? Indeed, things can get more complicated in the case of involuntary retirement but yet again, with the right precautions, an athlete can survive and still have enough money to restructure their lives and switch to other career paths. A simple precaution that an athlete could take is to create a ‘Plan B Fund’ where the athlete will save the amount required to pursue a specific college degree or start a business idea. By having the capital to invest in your education or in the opening of any other business, you already have an exit strategy towards another career. Of course, this by no means is an ideal path but as an athlete, given the nature of your professional career and your assets, you should always have a plan B in the case of involuntary retirement.

The circumstances and characteristics of your life as an athlete necessitate that you start structuring your wealth during the early days of your sports career.  Your post sports life will be greatly affected, either positively or negatively, by the manner you have dealt with the wealth accumulated during your sports career.  It is extremely important to remember that proper financial planning helps you design your financial future.  The earlier you start, the better off you are!

For a discussion of the process of wealth structuring and how it can affect your post sports financial lives you may contact us at