Most professional athletes’ career peak is short —no US professional league posts an average career longevity of more than six years, as mentioned in a Reinsurance Group of America article citing multiple sources. As such, transitioning to life after sports can be financially challenging. Not everyone is a LeBron James, Tom Brady, Lionel Messi, or Serena Williams, who can rely on lasting fame and ongoing opportunities.
To ensure long-term financial stability, you must proactively manage wealth, create income streams, and prepare for life beyond sports. Here’s how:
1. Create A Long-Term Financial Plan Early
Many athletes experience a dramatic shift from modest earnings to multi-million-dollar contracts almost overnight. While this influx of wealth is exciting, it comes with substantial responsibility. It’s easy for athletes to get caught up in the fast-paced, expensive lifestyle that often accompanies sudden fame and money, but those who start planning early set themselves up for financial success.
A long-term financial plan should focus on wealth preservation, retirement planning, and preparing for life after sports. This includes understanding the importance of saving and investing rather than spending everything during peak earning years.
You should also consider estate planning, tax planning, and healthcare costs for your post-career life. Working with a professional financial planner specializing in high-income earners can help you set up strategies that ensure money is managed wisely and grows over time. The earlier you start, the more opportunity you have to take advantage of compound interest, build diverse income streams, and plan for a sustainable future.
2. Diversify Your Income Streams
While earning millions in contracts might seem like enough, careers in sports can be unpredictable—a significant injury or early retirement can drastically cut earnings short. To mitigate this risk, you should create multiple sources of income that aren’t directly tied to your sports career. These additional income streams can provide a financial safety net and help build long-term wealth.
For example, investing in low-risk, high-yield opportunities such as real estate, dividend-paying stocks, or bonds can generate passive income. You should also consider starting businesses in industries you are passionate about or have knowledge in.
Another common avenue of diversification is through endorsements and partnerships, but aligning with brands and companies that reflect your values and have long-term potential is essential.
3. Save And Invest Wisely
You should treat your high earnings as a stepping stone to financial independence, ensuring you have enough saved to support yourself and your family for decades. While many professional sports leagues, such as the NFL and NBA, offer retirement benefits and pension plans to help athletes after they retire, these benefits are often not enough to maintain the lifestyle athletes may be accustomed to during their playing days.
One of the most effective ways to save is by maximizing retirement savings through tax-advantaged accounts like 401(k)s, IRAs, or other investment vehicles. These accounts provide tax benefits and the opportunity for significant growth over time through compound interest.
In addition to long-term investments, you should prioritize building an emergency fund. This fund is a cushion that can cover unexpected expenses or income gaps once your playing career ends. A healthy emergency fund can alleviate stress during the transition to post-retirement life, giving athletes more flexibility to pursue new opportunities without financial strain.
4. Prepare For Lifestyle Changes
Retirement can be a significant financial and emotional adjustment for professional athletes, especially if you have grown accustomed to a particular lifestyle during your playing years. Professional athletes often enjoy high levels of disposable income, which supports a lavish lifestyle that includes expensive homes, cars, travel, and luxury goods. However, once your career ends, the steady income from contracts and endorsements typically decreases or stops altogether. Failing to adjust spending habits and lifestyle choices to reflect this change can lead to financial strain.
To avoid this, you should plan for lifestyle changes before retirement. This may include downsizing homes or reducing discretionary spending on luxury items. Creating a post-retirement budget that accounts for reduced income is essential to maintaining financial stability. You must strike a balance between enjoying earnings during your prime and preserving enough wealth to sustain you through retirement.
It’s also important to note that lifestyle changes can be emotionally challenging. Many athletes struggle with the identity shift that comes with no longer playing professionally. By preparing for these changes, you can ensure fulfillment in post-career.
5. Explore New Career Opportunities
For many athletes, retirement from sports can feel like an end to their professional identity. However, with careful planning and a willingness to explore, you can transition into a successful career after sports.
Consider post-career opportunities while you are still active in sports. This could involve networking with business leaders, pursuing further education, or developing skills in areas of interest. Many athletes succeed in media roles, such as becoming sports analysts, commentators, or television hosts. Others choose to start businesses in industries they are passionate about, using their fame and influence to build brands and connect with potential customers.
Exploring different career options before retiring ensures you have a plan, giving you purpose and financial stability for the future.
6. Leverage The Athlete’s Mindset
Athletes develop unique skills—competitiveness, discipline, drive, and resilience—that can be powerful assets in any new career. The same mindset that pushes you to excel in the field can help you thrive in business, media, or other post-sports ventures. Your ability to set goals, work tirelessly, and push through challenges is crucial in achieving long-term success.
Competitiveness, a key trait in sports, translates well to the business world, where you can use your drive to outperform competitors and innovate. Teamwork and leadership skills, honed through years of collaboration, make you well-suited for managing teams or leading new ventures. Moreover, your ability to handle high-pressure situations and adapt to setbacks helps you navigate the uncertainties and risks of entrepreneurship or career transitions.
By leveraging these skills, you can confidently enter new fields and apply the same focus and determination that made you successful in sports.
7. Work With Trusted Advisors
Having a solid financial team in place is one of the most important steps you can take to protect and grow your wealth. Professional athletes are often targets for scams, bad financial advice, or mismanagement, so working with trusted financial advisors, accountants, and lawyers is essential to safeguarding assets.
Carefully vet your financial team and look for professionals with a proven track record and experience managing wealth for high-net-worth individuals. It’s crucial to seek experts who operate transparently and have your best interests in mind.
Staying informed and involved is equally important. Even with trusted advisors in place, you should regularly review your financial statements, understand where your money is going, and ask questions to ensure you remain in control of your financial future.
8. Improve Your Financial Literacy
Too often, athletes rely entirely on advisors without understanding the basics of personal finance, leaving them vulnerable to poor decisions or exploitation. By understanding financial concepts, you can make more informed decisions about your money and take greater control over your wealth.
Seek out opportunities to improve your financial knowledge. This could include taking financial literacy courses, reading books on personal finance, or attending workshops and seminars. Understanding core concepts like budgeting, saving, investing, debt management, and taxes is essential for long-term wealth management.
Furthermore, financial literacy helps you evaluate business opportunities, avoid scams, and make decisions that align with your long-term financial goals.
Case Study: Shawne Merriman’s Transition From NFL Star To Entrepreneur
Shawne Merriman’s journey demonstrates how one can successfully transition to life after sports through leveraging the athlete’s mindset. In an interview, Merriman shared that while he was still active in the NFL, he had developed an interest for mixed martial arts as part of his offseason training routine.
“It really took my football game to the next level. And that’s when I realized, I had a real passion for it,” Merriman said. It was this passion that would later evolve into a business venture.
After retiring, Merriman started his organization, Lights Out Xtreme Fighting, and focused on the business aspect of MMA. “I think for me to stay on the business side and building a brand, had a bigger longevity than me getting in a cage,” he explained. Later, recognizing the importance of distribution, Merriman created Lights Out Sports TV, his own sports streaming platform.
“I had all these ideas about sports programming,” he added. One such idea was The Ultimate Fan Zone, a live 60-minute television show that engages sports fans through the tailgating experience —cook outs, board games, conversations, partying, etc. “Being at other networks and streaming services, I couldn’t do it. I had to go along with what they wanted to do,” Merriman explained of the creative license he enjoys with having his own platform.
Merriman’s story highlights the importance of applying the athlete’s mindset—discipline, focus, and a relentless drive to succeed—to business. Just as he approached football with a determination to be the best, Merriman approached his ventures off the field with the same intensity. He didn’t rely solely on his NFL fame; instead, he used it as a springboard to build a business that could stand independently.
His journey illustrates that with the right mindset and a willingness to innovate and diversify, you can find new fulfillment and financial success beyond your playing days.
Final Thoughts
Athletes have a unique opportunity to build significant wealth during their careers, but ensuring that wealth lasts requires smart financial moves and proactive planning. By starting early, diversifying income, investing wisely, improving financial literacy, seeking expert help, and planning for life after sports, you can ensure financial success long after you leave the field or court.