It is unfortunate that many professional athletes with high-dollar contracts and lucrative endorsements file for bankruptcy within a few years of their retirement from professional sports. To avoid this trend, these individuals should seek financial planning for professional athletes.

Future Finances

Professional athletes typically earn high incomes for a very short period of time, 3-5 years on average. The pay schedules and variable endorsement deals make financial planning difficult, especially for after retirement. Develop a list of long-term goals. Your financial plan will work these goals into your investment and purchase decisions. Monitor your finances and retirement accounts.


Athletes earn high incomes, so they must pay high income tax. However, effective tax planning can significantly reduce this bill. For example, participate in all tax-advantaged retirement plans that your athletic association offers, such as 401(k) plans. Choose your permanent residence in a state with lower or no state tax, such as Florida or Texas. In addition, you may have to pay withholding taxes to states you travel to and play in. Take advantage of the tax credits your home state offers for paying taxes in any other state. Learn about itemized deductions and how they can reduce your tax burden, especially in years with endorsement, appearance, residual or signing bonus incomes.


Avoid contracting an advisor who is within your family or friends. These individuals have a personal stake in how you spend your money and may not advise you on financial decisions that work best for your present and future. In addition, agents may do their best to negotiate your contracts, but they may not have the experience or knowledge they need to effectively manage your finances, even if they are licensed to sell financial products.

Choose a fiduciary who promotes an advisory relationship. Be sure to pre-negotiate a fee for financial services. This contract should be ongoing, through your career and into retirement. It should cover major expenses and purchases, such as cars and homes, as well as investments.

You can have financial freedom well into retirement with proper financial planning.