At some point in time, all professional athletes bow out of the spotlight. Just as other people your age are reaching managerial positions in their chosen careers, you will be entering retirement. For NBA players, this typically happens in the mid- to late- thirties. During the five years or so you played in the big leagues, you most likely earned millions of dollars. But now what? Do you have enough money to last for the rest of your life? Do you have enough money to support a spouse and children?
You are a very lucky man indeed if you have enough money in your bank account to support yourself and your family for the next few decades. However, most likely you are going to have to make some smart decisions as you map out a strategy for a post-basketball life. The article below lists six tips for planning your retirement from the NBA.
One of the best strategies for securing a comfortable life for the rest of your days is to invest the money you made as an NBA basketball player. For a lot of athletes, this means real estate. However, as the Great Recession of 2007-08 proved, property is not a guaranteed safe investment.
Ideally, you should diversify your assets. Some money can go into real estate investments but consider other financial options as well: stock, bonds, commodities, securities, and foreign exchange. The idea is to get the largest annuity plan possible (annuities are fixed annual payments). This will ensure that you have a reliable cash flow while at the same time budgeting your funds.
More likely than not, higher education was not a priority for you. Most players are drafted straight out of high school or else attended college courses that lacked any real substance. After you stop playing basketball, it may be worthwhile for you to return to the classroom and earn your degree.
Maybe you didn’t realize it when you were given a full ride at university but college tuition is very expensive. Plan ahead to make sure you have enough money for the fees. Plus, if you have any children or plan to have children, you should start building up a trust fund now so that it is sufficient enough to pay the bills by time they are ready to enter college.
As a professional athlete, you regularly come in contact with people working at every level of the entertainment industry. While still in the NBA, why not collect a few business cards? A job in coaching, managing, broadcast media, or even sales could be quite enjoyable for you once you step off the court.
You will have a leg up on the competition by being a famous basketball player – you just have to know where to employ this advantage. Collecting the contact information of people in various professions and maybe even asking them about the demands of their job, can be a great way to find a new career path to set out on.
Many sports exact a physical toll on an athlete and basketball is no exception. While you were still in the NBA, there was a team of highly trained doctors and physical therapists that could help you stay healthy for no cost at all. However, once you retire you will be on your own. And unless you get another full-time job, you are going to have to purchase your own insurance.
When planning for your retirement, be sure to set aside some money for routine examinations as well as for emergencies. A debilitating injury or disease can be ruinous to your well-being and to your finances. Your best bet is to be prepared for any eventuality, including healthcare for your family.
As mentioned previously, a retired athlete is still going to have to help financially support a spouse, children, parents, and maybe even siblings. There will be expenditures for healthcare, education, celebrations, etc. One of the main reasons you are trying so hard to come up with a good retirement plan is so that your loved ones can lead happy, comfortable lives.
Another family-related topic that is uncomfortable but necessary to think about is the safety of your spouse and children. Unless you find another job or an organization in which to involve yourself, the long years of retirement can take quite a mental toll. Many retired athletes do not know what to do with themselves now that they have quit playing sports.
This can lead to negative feelings such as boredom, depression, and anger. These negative feelings can in turn lead to alcohol and substance abuse or worse, physical violence against those dearest to you. A crucial component of your retirement plan should be finding different ways to spend your time- otherwise, you might start to head down a terrible path.
Uncle Sam will not leave you alone just because you have retired. Indeed, if you successfully get your money to work for you, the government is going to try to take a noticeable chunk out of the profits. If you do not already employ a manager or accountant, you should seriously consider doing so- even if it is only for once a year. There are many ways to use the tax code to your benefit and save money. But unless you are familiar with filling out tax forms, you are going to need some help taking advantage of possible deductions and write-offs.
A retirement plan can ensure that life after the NBA is comfortable and secure for you and your family. Moreover, having a well thought out strategy will make you less susceptible to the phony investors who prey on naïve athletes. In essence, your plan should be to avoid making any bad financial decisions and to make as many good financial decisions as possible. However, the finer details of how to accomplish this will have to be worked out by you.