In the retirement industry, the beginning of July signals the official beginning of summer with Fourth of July festivities, and, reminds us of one of the greatest retirement plans to date—otherwise known as Bobby Bonilla Day.
Every year until 2035, on July 1, former baseball player Bobby Bonilla receives a check for $1,193,248.20 from the New York Mets, even though he hasn’t played a baseball game in close to 25 years.
It all started in 1999 when Bonilla’s agent, Dennis Gilbert, negotiated a deal with the Mets that bought out Bonilla’s final year and the $5.9 million salary owed to Bonilla for the 2000 season. Bonilla, a six-time All-Star player who was best known for his time with the Pittsburgh Pirates, had just faced a subpar season with the Mets in 1999, where he batted just .160 in 60 games.
Rather than accepting the $5.9 million lump sum, Gilbert and Bonilla convinced the Mets to defer the money for over a decade in exchange for a guaranteed 8% interest rate. Since former Mets owner Fred Wilpon was invested in disgraced financier Bernie Madoff’s Ponzi scheme, which was promising 10% to 15% yearly returns at the time, he agreed to the deal.
At the time, Wilpon and the Mets believed they would make a significant profit if the Madoff scheme took off, therefore Bonilla’s new arrangement seemed to be no big deal.
But it sure turned out to be. Even while Madoff’s scheme was revealed in 2008, where it was found that he had defrauded thousands of investors of billions, the contract between Bonilla and the Mets was still on.
Gilbert later worked in a second deferred contract plan with the Mets and Orioles for Bonilla, which pays him $500,000 a year for 25 years. Payments for that deal began back in 2004.
It wasn’t all bad news for the Mets, however. Letting Bonilla go brought in pitcher Mike Hampton, who would go on to be named the 2000 NLCS MVP and help secure a Mets appearance in the 2000 World Series.
While Hampton would go on to play with the Colorado Rockies the following season, the Mets then drafted David Wright in the 2001 MLB draft during the supplemental round, provided as compensation for losing Hampton in free agency. Wright who would play with the team for his entire 14-year career and cement himself as a Mets legend.
For Bonilla, by 2011, the original $5.9 million had grown to $29.8 million. At the end of the deal, Bonilla is expected to collect an additional $23.9 million by the time he reaches age 72—all because he deferred his contract by a decade.
It goes to show that good things can happen to those who wait.
SEE ALSO:
- Smiling All the Way to the Bank: Happy ‘Bobby Bonilla Day’
- ‘Greatest Retirement Plan in History’: It’s Bobby Bonilla Day
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
