The NFL Retirement Plan: Everything You Need to Know (2022)
Need help with your NFL retirement plan?
Too much mystery surrounds NFL retirement.
You may find information here and there, but it’s scattered. What’s needed is a resource that puts everything together. A resource that allows you to see the whole picture.
That way, you can begin planning for retirement. Instead of letting retirement plan for you.
NFL careers are short, and players come into life-changing money at a young age. What do athletes do with all that money? Many retired athletes go broke before they even start receiving a pension. Unfortunately, players aren’t getting the right information to plan for life after pro football.
In this article, you’ll find all that valuable information in one place. It’s carefully laid out so you can capitalize on it to create generational wealth — long before you hang up your jersey.
Let’s begin.
Do NFL Players Get a Pension?
For most U.S. corporations, the habit of handing out pensions is long gone. That’s if they ever had that habit to begin with. On the other hand, the NFL continues to offer pensions for retired players — if they meet certain conditions. More on that later.
The NFL pension is one of the features of the Bert Bell/Pete Rozelle NFL Player Retirement Plan, which was recently updated. I’ll cover some of the critical updates below as well.
The Rarely-Discussed History of NFL Pensions
In 1960, the American Football League (AFL) had its first season. NFL owners saw this new league as a threat. If NFL players hopped over to the AFL, the NFL owners would threaten to snatch the player’s pension.
Back when the AFL and NFL existed as two separate leagues, NFL players had greater leverage. When NFL owners threatened NFL players, the players would use court actions as their defense. The result? NFL players would gain improved pension coverage and greater benefits.
In 1966, the NFL and AFL merged to become one league. This monumental move crushed all of the leverage NFL players had. Forever.
On July 3rd, 1968, the National Football League Players Association (NFLPA) voted to have the very first player strike. The goals were to increase compensation, pensions, along with other benefits for all players. NFL owners responded by establishing a seven-day lockout.
On July 14th, 1968, the NFL and NFLPA reached their first collective bargaining agreement. The result? NFL owners would contribute $1.5 million from league revenue to players’ pensions.
In January 1970, the NFLPA and the American Football League Players Association (AFLPA) merged. Both associations wanted to work together so they could get better terms for players, including better pensions.
In Spring 1970, the NFLPA became a certified union. This happened right after NFL owners requested that lawyers be kept out of CBA negotiations. They also requested that players quit asking for increased preseason pay.
In July 1970, NFL players went on a two-day strike. The NFL owners threatened to cancel the season, but the two groups reached a compromise. A new, four-year CBA was established. As a result, pensions increased.
In 1993, NFLPA was re-certified as a union. This was followed by a new CBA. The result from this CBA? Pensions for NFL players nearly doubled. And for the first time, the CBA retroactively enhanced pensions for NFL players already retired.
Since 1993, the NFL and NFLPA extended the CBA five times: 1996, 1998, 2000, 2002, and 2006. Each extension increased the salary and benefits for past, present, and future NFL players. In May 2008, NFL owners opted out of the CBA.
On August 4, 2011, the NFL and NFLPA signed a 10-year CBA. The 2011 CBA, combined with the Legacy Benefit, set it up so that more than $655 million can be set aside, allowing increased pensions for retired players.
The 2020 CBA, which will be valid until the conclusion of the 2030 season, commits nearly $2 billion to NFL player benefits. The latest CBA will result in a huge increase in pensions for NFL players.
How Does NFL Retirement Work?
When NFL players retire, they exit a game they’ve based their whole life around. With football out of the picture, they must find a new focus, a new mission.
So, what do some retired pros do during this new phase of their lives?
Some launch broadcasting careers. Some launch businesses. Either way, the players who make NFL retirement plans years in advance often thrive, and you’ll likely have many questions for a wealth manager while planning for your individual retirement.
If you’re wondering: “What age will you retire from the NFL?”
Here’s the short answer:
NFL players don’t have the luxury to choose when they retire. Age, injury, or a cheaper version of you will be the reason you hang the cleats up.
NFL players don’t have to retire at any certain age.
The next section will have more details about that.
What Is the NFL Retirement Age?
Usually, NFL players retire at a young age, often in their 20s. On average, NFL players only play a few seasons. Only the best can retire in their 30s.
As some players age, they become more and more protective of their bodies. This can lead to players deciding to leave the game … before they lose their game. They start thinking about their moves off of the field.
Other players find it too difficult to leave the game they fell in love with as a kid.
So, considering all of these factors, it’s clear that there’s no set retirement age. It all depends on the individual.
How Long Do You Have to Play in the NFL to Get a Pension?
NFL players must play for three seasons before they can be eligible to receive a pension. That's when he'll be considered vested. Meaning he's eligible to receive benefits negotiated under the CBA.
But what's considered a season? The NFL player must be on a team's roster for at least three games (regular season or postseason).
For each season the player plays, he earns credits. The more credits, the greater his pension amount. So, the amount NFL players make after retirement will vary.
How Much Do Retired NFL Players Make?
The amount of income a retired NFL player receives is based on his number of seasons played. Each season represents a credit towards the amount of pension money he can receive.
Also, NFL players must be at least 55 years old to receive their full pension money. If a player wants the money earlier, he can receive a lesser amount plus penalties for taking the pension early. For a player that can wait until 65 to take the pension, the benefit greatly increases.
On average, retired NFL players earn about $43,000 annually from their pension.
Most players also decide to contribute to a 401(k) plan during their careers. The total amount of the 401(k) plan is based on how much the NFL player contributed from his salary. This and the NFL CAP plan are investment accounts and should be coordinated with the rest of your investment accounts.
The NFL Annuity Program can provide another source of income. The amount of income from the annuity depends on how much was contributed each credited season. It also depends on the age the player decided to receive annuity payments and how often he decided to receive them. A retired player can access this stream of income as early as 35.
NFL Hall of Fame Pension
Former NFL players who are in the Hall of Fame do not receive a specific pension outside of what other former NFL players receive. A Hall of Famer’s pension is determined by the number of years he played. Just as with a non-Hall of Famer.
What Other NFL Retirement Benefits Are There?
In addition to the pension plan, there are two other benefits NFL players can access.
One of the benefits is the Second Career Savings Plan. That’s a 401(k)-type plan where the employer matches the employee’s input, two-for-one. This plan is available after the NFL player plays two seasons.
There’s also a Player Annuity Program. This is a benefit that’s available for former players after playing four seasons.
But these aren’t the only types of NFL retirement benefits available to former players. There are also health care benefits.
Insurance on the NFL Plan after the 5 years provided post retirement can cost up to $35,000 annually just in premiums. This is a massive cost that should be planned for before a retired player has to start paying the premiums.
The NFL Dedicated Hospital Network Program grants players $25,000 annually for medical care and another $25,000 for mental health services.
This is not a replacement for insurance but an incredible earned benefit that should be utilized when possible.
According to the National Football League Alumni, former NFL players have access to these benefits via the Former Player Life Improvement Plan:
A Joint Replacement Program for former players who need joint work done to their body
Life insurance for former players under the age of 55
A card providing discounts for prescription drugs
A Medicare supplement program that helps with payments for Medicare supplement insurance, for former players 65 or older, covered by Medicare
A neurological care program that covers the expenses for neurological work on the body
Access to assisted-living facilities
A spine treatment program that covers all expenses
NFL Player Engagement provides educational and self-development resources for current and former NFL players:
“From aiding players with building their brands and managing their finances, to supporting their physical, mental and financial well-being, the goal of the Player Engagement department is to provide the best community of care to serve, equip, empower, and support the player and his entire ecosystem during and after his playing days.”
Another benefit that some retired NFL players can receive is a severance payment. According to NFLPA, former NFL players need at least two credited seasons to access their severance payment.
The severance payment is supplied as a lump sum, via check. Players receive this check one full year after the termination date of their NFL contract. The amount is based on the number of credited seasons the player played and which years he played.
For instance, for the years 2017–2019, players received $22,600 per credited season as part of their severance package.
Planning Ahead for NFL Retirement
Now that we’ve covered the pension and benefits available to retired NFL players, it should be clear: The wealth generated during a playing career needs to last.
Former Seattle Seahawk and Super Bowl Champ, Zach Miller, saw a lot of players making expensive mistakes during his time in the NFL.
You can hear everything Zach wished he knew as a rookie in this interview: Owning Your Wealth as an NFL Player. Below are a few of the retirement planning tips he talks about with NFL players now, as a Private Wealth Advisor with AWM.
Recognize Your NFL Career Will Eventually End
As you know, all NFL careers have an expiration date. No one knows its exact date, but you should condition yourself to think years ahead, so you’re not taken by surprise.
“You realize real quick that eventually your career will end. It happens to all athletes. There is a timer on your career. You can’t play forever. And, as soon as you can understand that as a player, as soon as you can understand that the end will eventually come, the better you can start planning for after football.”
As NFL players rack up mileage on their bodies, there are always fresh, young players ready to come up. Even loyal veterans can get cut and replaced for less expensive players.
The earlier you start thinking about making a living without football, the more successful you’ll be in retirement.
View Yourself as the CEO of a Business
You’re the CEO. Your life is your business.
The earlier you realize this in your career, the better your life will be, financially and otherwise.
The money you produce from employment is your revenue. With that money, you cover your expenses and support your lifestyle. But also consider surrounding yourself with a team of experts. Experts from fields like investing, accounting, tax law, and so on.
“You’ve put in so much effort and so much time into being an NFL player, to achieving that goal. And to achieving the kind of excellence on the field that you should demand off the field. Whether that’s who you hire as your agent, who you hire for your financial team. And it should be a team. It shouldn’t just be one individual.”
Think of these professionals as your employees, tasked with increasing your wealth. Hold your team to high standards, just as a boss does with employees. More on that in a little bit.
Work with a Specialized Financial Team
The greatest driver of your wealth is your NFL career. What you need is a financial team that can help you protect and grow that wealth. But not just any financial team.
You need one that specializes in meeting athletes’ needs. One that understands your lifestyle. One that can see things from your perspective.
In short, you want to hire a financial team that gets you.
Think of it like this. You would never hire a physical therapist, trainer, nutritionist, or even a psychologist who doesn’t specialize in treating athletes. Your livelihood depends on their advice.
Still, players often choose a generic brokerage house to manage their investments, thinking only about investment returns.
Zach Miller shared his firsthand experience:
“I wish that I would have known what a Certified Financial Planner was when I was a rookie. Because I would have just hired one immediately and really vetted that professional. Instead, I hired an advisor from Merill Lynch. And while these people who work there, they can be good people, but the business model is not really set up to help an athlete succeed.”
You need someone qualified to help you make decisions about all the factors that can have a major impact on your wealth and your family’s future -- like disability insurance, buying property, taxes, and estate planning.
Think like an NFL owner
What do the wealthiest people in the world do with their money?
How did NFL owners become wealthy enough to buy an NFL team?
These are the types of questions you should ask yourself. When you do, you begin to train yourself to think like an NFL owner, and not one of the “assets” on their team.
Owners make business decisions, detached from emotion.
Most billionaires wouldn’t have become billionaires without the support of a top-notch team, but they don’t trust blindly -- they verify results and demand accountability.
In fact, did you know that some NFL owners establish independent family offices?
That’s how far they go to protect and grow their wealth.
So, think like an NFL owner.
Surround yourself with a team of proven financial experts, and hold them accountable. If they aren’t helping you reach your goals, find someone who can.
“They need to be open to being evaluated by an outside source. They need to be honest with you. They need to prove their value to you because there's too many athletes, too many NFL guys that get taken advantage of. Sometimes it's outright fraud. Sometimes it's recommending bad investments or in other cases, it's just not providing the service that the player deserves.”
NFL Retirement Decoded
This article covered a lot of material, and you can always bookmark it as a resource to reference in the future when you have questions about NFL retirement.
You don’t have to be perfect. You just need to get started and make one decision at a time to start owning your wealth.
If you need more information based on your specific circumstances, it’s always helpful to speak with an experienced wealth advisor.
Talk to Zach
Contact me if you have any questions about how you can plan for a happy (and lucrative) retirement.
