Traditional pensions are becoming increasingly rare in the U.S. as more and more companies turn to other retirement benefits like employee-controlled 401(k) plans. The NFL is part of the small percentage of corporations that still offer pension plans.
Pension benefits in the NFL, like those at any other job, are based on the length of time players are employed. To be eligible for pension benefits in the NFL, a player must play for three seasons. (For a season to count for pension purposes, the player has to be on the roster for at least three games.) The player then earns credits for each season played, and these credits increase the amount of his pension.
NFL Retirement Age
Players tend to retire from the NFL at a young age — sometimes in their 20s. The average player only plays for a few seasons, though top players tend to play a bit longer before retiring.
The average NFL career length is trending shorter and shorter, however, as more and more players decide to retire early. In the past, many players retired due to injuries that made them unable to play. Nowadays, more players are choosing to retire before they sustain a career-ending injury that would also affect their ongoing health and lifestyle. However, this doesn’t mean that they are paid retirement benefits as soon as they decide to retire.
Age to Access Pension
Standard age requirements apply for former NFL players to be paid retirement benefits — players must be 55 years old to receive money from their pension. If players want money earlier, they can choose to receive benefits from the annuity program as early as age 35. So, even though players retire at a young age, they can’t access their full NFL retirement benefits right away.
NFL Pension Amounts
The dollar amount of a former NFL player’s pension check depends on how many seasons he played. Once eligible, the player receives a credit for each year played, which equates to a certain monthly pension amount — for example, for seasons played from 1998 to 2011, this amount is $470 per month.
NFL pension value increases periodically and is the same for all players regardless of salary. Currently, a player with the minimum of three years of play would receive an annual pension check of $21,360 at retirement. On average, retired players receive about $43,000 annually from their pension.
Players who take advantage of the 401(k) plan would also be able to make withdrawals from that account when eligible. The amount of this benefit would depend on how much he chose to contribute to the plan while he was still earning money.
Similarly, players with an annuity could be receiving payments from that as well. Again, the amount would depend on the total amount of the annuity; it would also depend on how the player chose to receive payments (including the age to start and the frequency of payments).
Other NFL Retirement Benefits
Players can qualify for two other benefits in addition to the pension plan. One is a 401(k)-type plan (the Second Career Savings Plan) that includes two-for-one employer matching, and it is available to players once they play for two seasons. The other benefit is a Player Annuity Program, which is available after they play for four seasons.
Former NFL players are also eligible for several types of health care benefits. The National Football League Players Association (NFLPA) describes the following benefits available to former players:
- A Joint Replacement Program provides assistance to former players who require medically necessary joint replacement
- A Medicare supplement program helps to pay for Medicare supplement insurance for those 65 or older and covered by Medicare
- Life insurance for those under 55 years of age
- A neurological care program with no out-of-pocket expense to retired players
- A spine treatment program with no out-of-pocket expense to retired players
- A discount prescription drug card
- Priority access to assisted living facilities
NFL Retirement Bankruptcy Trends
Despite minimum annual salary requirements of at least $480,000 for active-roster players, nearly 16% of retired NFL players file for bankruptcy during the twelve years following their retirement. There are several factors that contribute to this:
- NFL players have a relatively short time span to earn money—frequently only a few years rather than forty.
- Players frequently make risky investments and bad spending decisions during their time in the league and/or shortly after.
- Players want to maintain an expensive lifestyle, which is easy to do on an NFL salary, but much more difficult after retirement.
- Players sometimes have mental or physical problems related to playing football, which can lead to costly medical expenses.
It might be hard to imagine running out of money after earning so much, but the lifestyle of football players and other professional athletes is often scaled quickly to their earnings — it then becomes the norm, and it’s difficult to scale it back down. Bankruptcy often comes down to inadequate planning and budgeting for retirement spending.
Retirement Benefits for Other Professional Athletes
In the course of our research, we found information about retirement benefits for other professional sports in the United States.
It only takes 43 days of play for professional baseball players to become eligible for a pension—much less time than most other professional sports. The maximum annual pension benefit for baseball players is $200,000 per year, which is earned after 10 years of play. Players can retire at age 62 and receive the maximum benefit.
With the MLB pension, if the former player dies, his surviving spouse is still entitled to some pension benefits. In addition to the pension, eligible former baseball players can continue health insurance coverage through the league for a shared cost.
Similar to the timeline for the NFL pension, eligibility for an NBA pension begins after three years of play. Former NBA players have options for how to receive their pension benefits: They can either begin receiving them at age 50 and get a lesser annual amount, or they can wait until age 62 and get a greater annual amount. For example, a three-year player could get around $20,000 annually starting at age 50 or wait until age 62 and get around $60,000 annually. In addition to the pension, the NBA offers a 401(k) plan with employer matching.
The WNBA offers a 401(k) plan but not a pension plan. Players receive an employer contribution of up to 25% of player contributions plus around 2% to 4% of their base salaries, depending on how long they’ve played.
Hockey players are eligible for the NHL’s pension plan after just one game. The NHL’s pension plan is a defined contribution plan rather than a defined benefit plan, which means that players are not guaranteed to receive a specific amount at retirement; instead, specific amounts are contributed to their retirement accounts. The NHL also differs from the NFL in retirement age: Former hockey players only need to be 45 years old to receive full retirement benefits, with the option to receive lesser benefits at age 35 and maximum benefits at 62.
For soccer players, there is no pension plan. Instead, the MLS offers a 401(k) plan with an employer match (typically around 4%).
For pro golfers, retirement benefits are quite different than other professional athletes. First, no defined benefit plan exists; there are no guaranteed retirement benefits. Instead, benefits come in the form of contributions based on performance for that year. Contributions are determined by how often players make the cut in a tournament as well as how much they earn throughout the season. The age to receive benefits also works differently in the PGA because golfers may still be playing at an age other professional athletes would have long since retired. Those who play in less than 15 events per year can begin receiving benefits from the plan at age 50; those who continue to play can begin receiving benefits at age 60.