It may be offseason, but last weekend’s draft festivities highlighted the excitement (and anxiety) surrounding newly minted NFL careers. Lost in the revelry was one depressing fact related to the other side—the incredibly high rate at which retired professional athletes go broke.
Case in point: Warren Sapp made $82,185,056 in his NFL career. He ended up with $826.04 in his bank account.
The stats aren’t new, or encouraging. More than 78 percent of NFL stars will file for bankruptcy within five years, with 60 percent of NBA players going broke during the same time period, and baseball players file for bankruptcy four times more often than the average U.S. citizen. For perspective, Wyatt Investment Research reports that the annual household bankruptcy rate likely hovers around 1.2 percent.
One reason, of course, has to do with the financial education that too many players do not receive. Yet there are signs—however slight—players might finally be getting it, and they come from unlikely sources.
Rob Gronkowski released a book in 2015 (Shakespearean in tone, we’re sure) called It’s Good To Be Gronk. The New England Patriots’ superstar, legendary goofball and namesake of the predictably wild Gronk Party Ship divulged the following surprising fact:
“To this day, I still haven’t touched one dime of my signing bonus or NFL contract money. I live off my marketing money and haven’t blown it on any big-money expensive cars, expensive jewelry or tattoos and still wear my favorite pair of jeans from high school… I don’t hurt anyone (except Gord with the occasional kick to the groin), I don’t do drugs, I don’t drive drunk, I don’t break the law… I’m a 23-year-old guy just looking to have a fun time.”
And then there’s the Seattle Seahawks’ Marshawn Lynch—who may or may not be retiring and who should have gotten the ball—as the person in the locker room teammates turn to for help with their 401(k)s.
“Marshawn helps me with a lot of things as far as understanding my worth,” wide receiver Tyler Lockett told ESPN.com. “He’s a great guy. Even at practice, he’s helped us with the 401(k), talked to us about that. … He helps us with a lot of stuff.”
He probably has a heavy allocation to Skittles, and his advice prowess would naturally lend itself to a financial career after his time with football is done (let’s hope it’s more Dwayne “The Rock” Johnson and less Lenny Dykstra).
Another sign of hope? The high-quality of the NFL’s 401(k) plan.
Research firm BrightScope’s list of the top retirement plans found the NFL Player Second Career Savings Plan at the No. 1 spot for the third year in a row.
So, bad? Yes, but getting better.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
