Why Bankruptcies Are So Common Among Retired Professional Athletes

It’s no secret that numerous professional athletes earn significant salaries during their careers, with annual pay often reaching into seven, or even eight, figures. However, studies reveal that a surprising number of athletes face serious financial difficulties after retirement, with many filing for bankruptcy within just a few years of leaving the field. While we might not enjoy the same fame and fortune as sports stars, some of the factors that lead them toward financial struggle can affect individuals whose athletic careers never got past gym class. 

There are many reasons why retired athletes are especially prone to financial difficulties, such as:

• Short earning windows — The average NFL career lasts fewer than five years. While the minimum salary is approximately $800,000, this amount is taxed at a high rate even though the recipient might not never approach this income after their twenties. Moreover, medical conditions associated with playing could prevent them from certain types of work. In any industry, people who face a physical risk or whose income varies widely from year to year could face severe money troubles during a down time. 
• Pressure to spend — We’re all familiar with famous athletes who purchase luxury items, such as expensive homes, cars and jewelry. Many also wish to share their good fortune by supporting family and friends financially. When the big checks stop coming, many find it difficult to adjust their spending habits to match a new, lower income.   
• Risky investments — Athletes are frequently approached with high-risk investment opportunities, from restaurants to real estate ventures, that promise big returns. Unfortunately, many of these ventures fail, resulting in significant financial losses. 
• Lack of proper financial advice — Without strong financial guidance, it’s easy for young athletes to mismanage their money, invest poorly or fall victim to financial schemes. Professional sports leagues have increased financial education programs, but they often come too late for athletes who are already in the spotlight, earning large sums with little knowledge of budgeting, investing or tax planning.

To avoid pitfalls, athletes, and people in every line of work, need to prioritize financial planning from the start of their careers. However, there are many instances where outside circumstances make it impossible to meet one’s financial obligations. At this point, the best course of action is to speak with a seasoned bankruptcy attorney who can advise on debt relief options and explain how life after bankruptcy might look. 

Jeff Field & Associates provides strong counsel to Georgians throughout the bankruptcy process. If you’re dealing with overwhelming debt, please call 404-381-1278 or contact us online. We have locations in Douglasville, Gainesville, Bogart, Lawrenceville, Marietta and Scottdale.