July 1 is often thought of as a kickoff to America’s annual Independence Day celebration—especially when it falls on a Friday leading into the holiday weekend. But currently, the first day of July is also known as “Bobby Bonilla Day,” a very unofficial holiday that celebrates one of the greatest individual retirement plans in history.
Each July 1, the former All-Star Major League Baseball player, who last played in 2001, receives a payment of $1,193,248.20 from the New York Mets as a result of a 1999 contract buyout brilliantly negotiated by his agent, Dennis Gilbert.
The Mets wanted to buy out the final year and $5.9 million due Bonilla for the 2000 season after the slugger suffered through a disastrous 1999 season where he batted just .160 in 60 games. But instead of accepting the $5.9 million upfront, Gilbert and Bonilla persuaded the Mets to defer the money for a little more than a decade in exchange for a guaranteed 8% interest rate.
The Mets were amenable to the idea because owner at the time Fred Wilpon was heavily invested in Bernie Madoff’s historic Ponzi scheme, which was promising 10%-15% yearly returns. While we all know how that turned out, deferring the money did help the Mets pursue free agents including star pitcher Mike Hampton, who would be named the 2000 NLCS MVP and help the Mets to the World Series that year (which they lost to the Yankees).
When Hampton then signed as a free agent with the Colorado Rockies after that season, the Mets received a supplemental draft choice for the 2001 MLB draft, which they turned into Mets legend David Wright, who played his entire 14-year MLB career with the team.
Getting back to Bonilla, the $5.9 million had grown to $29.8 million by 2011. Spread across 25 years until 2035 results in the $1,193,248.20 annual payment. Over time Bonilla is banking an extra $23.9 million by waiting a decade for his first payment.
And he gets to keep collecting that $1.19 million check every July 1 until 2035, when Bonilla will be 72 years old.
A six-time All-Star, Bonilla enjoyed a 16-year MLB career. He was best known for his time with the Pittsburgh Pirates, where he played in an early 1990s outfield with Barry Bonds. Bonilla finished second in NL MVP voting in 1990.
Gilbert also negotiated another deferred contract plan with the Mets and Orioles for Bonilla that pays him $500,000 a year for 25 years, with payments that began back in 2004.
Bonilla wasn’t the only player the Mets inked a deferred money deals with during those years. Former star pitchers Darryl Strawberry and Bret Saberhagen are still on the team’s payroll. Strawberry is still paid $1.64 million every year through 2033 (based on an original 1985 contract) and Saberhagen is due $250,000 per year through 2029.
Also notable, Ken Griffey Jr. receives $3.59 million from the Cincinnati Reds every year through 2024 as the deferral from the 9-year, $116 million deal he signed back in 2000.
SEE ALSO:
• ‘Greatest Retirement Plan in History’: It’s Bobby Bonilla Day
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
