Professional athletes live the life that most people dream about. They enjoy large paychecks, big endorsement deals and national publicity. Throughout their careers, they are loved and adored by fans in their respective sports. Upon retirement, most professional athletes also have a league-sponsored pension plan to look forward to. Surprisingly, pension plans vary greatly among different sports, with some leagues providing players with lots of perks, and others offering players the bare minimum.
In Pictures: 9 Ways To Go Bankrupt

NBA players have one of the most generous pension plans in all of professional sports. They are vested into their pension plans after playing at least three seasons in the league. The minimum benefit for a player that retires at the age of 62 is $56,988 per year - not a bad retirement for a three-year career. The maximum benefit for any player is $195,000, and it takes 11 years of NBA service to qualify for this benefit.

But that's not all! NBA players are also eligible to participate in a league-sponsored 401(k). Do you think your 401(k) plan is good with a 50% matching policy? The NBA matches player's contributions up to 140%. (Learn more about retirement plans in Independent 401(K): A Top Retirement Vehicle For Sole Proprietors.)

The NFL could stand for "Not For Long," with the average career lasting only three years - just enough to qualify for the league's pension plan. The league's plan is based on years of service in the league. Players who retired in the '80s and '90s receive anywhere from $3,000-5,640 per month for every season played in the NFL. Newly retired players receive $5,640 dollars monthlyfor every year of service. Players with 10 years of service receive an additional retirement bonus in the form of an annuity.

Players are eligible to receive their full benefits at the age of 55. While the pension plan is much worse than other sports, the NFL does offer a generous 401(k) plan. The league matches every player's contribution up to 200%. (Housing your retirement plan inside a variable annuity contract offers some big advantages, but only if you are close to retirement. Find out more, in Should Your 401(k) Be In An Annuity?)

Major League Baseball has the best pension program in all of sports. A big league player needs just 43 days of service to qualify for a pension benefit. Forty-three days of service can guarantee an MLB player a $34,000 per year pension benefit. One day on an active roster qualifies a player for full comprehensive medical benefits.

Major league baseball players become fully vested in their pensions after 10 years of service. It is not uncommon for retired baseball players with over 10 years of service to receive over $100,000 annually upon reaching the age of 62. Baseball has the most well-funded pension program with estimates valuing the plan at over half a billion dollars.

NHL players can start withdrawing their pension benefits at the age of 45. Players are not fully vested, however, until the age of 45. NHL pensions require that a player be active for at least 160 games to qualify for the maximum pension benefit. Players with less than 160 games of service receive the maximum benefit under Canadian law, and players with 160 games or more of service receive the maximum pension under U.S. law, which is $45,000 annually. (The maximum amount you may borrow from your qualified plan is either 50% of your vested balance or $50,000, whichever is less. Find out more, in Borrowing From Your Plan.)

The PGA has the most convoluted pension plan of all of the major sports. The amount of money in a professional golfer's retirement account is not guaranteed. It is based on their performance during the season, position on the money list and the number of cuts made during the season. Players are rewarded with contributions for participating in and playing well in tour events. Players earn funding as they participate in more and more tour events. Players also earn contributions of $3,800 and up for each cut that is made.

The best part of the PGA's pension plan is that successful players can accumulate millions of dollars in their retirement account at the end of their career. The downside is that players that miss cuts and perform poorly will be left with virtually nothing in their pensions.

The Bottom Line
As you can see, athletes in different sports have totally different retirements to look forward to. Whereas athletes in MLB and the NBA can look forward to fat cushy paychecks after their playing days are over, NHL and NFL players will have significantly far less to work with.

Catch up on your financial news; read Water Cooler Finance: I-Spy, IPOs And iPhones.

Related Articles
  1. Retirement

    What Does It Cost to Retire in Panama?

    Learn how much it costs to retire comfortably in Panama, and why it has become one of the most popular retirement destinations in the world.
  2. Investing

    Baby Boomer Philanthropy Shifts Wealth Adviser Focus

    Wealth advisers who integrate philanthropy and finance planning can stand out with baby boomer clients.
  3. Retirement

    The 5 Best Retirement Communities in Dallas, Texas

    Discover why the Dallas/Fort Worth area of Texas is a popular retirement destination, and five of the best retirement communities in the area.
  4. Stock Analysis

    3 Stocks that Are Top Bets for Retirement

    These three stocks are resilient, fundamentally sound and also pay generous dividends.
  5. Professionals

    How to Protect Retirement and Help Adult Kids

    Parents can both protect their retirement money and help their adult kids. Here's how.
  6. Retirement

    10 Ways to Save Your Retirement: It's Not Too Late

    It's not too late to start saving for your retirement, even if you took longer to start thinking about it and doing something about it.
  7. Investing

    Why Is Financial Literacy and Education so Important?

    Financial literacy is the confluence of financial, credit and debt knowledge that is necessary to make the financial decisions that are integral to our everyday lives.
  8. Investing

    10 Ways to Effectively Save for the Future

    Savings is as crucial as ever, as we deal with life changes and our needs for the future. Here are some essential steps to get started, now.
  9. Mutual Funds & ETFs

    Mutual Funds Millennials Should Avoid

    Find out what kinds of mutual funds are unsuitable for millennial investors, especially when included in millennial retirement accounts.
  10. Retirement

    This Is How You Could Live in Costa Rica for $1,000 a Month

    Explore the cost of living in Costa Rica, and learn how you could sustain a nice middle-class lifestyle for yourself on about $1,000 a month.
  1. Can I borrow from my annuity to put a down payment on a house?

    You can borrow from your annuity to put a down payment on a house, but be prepared to pay an assortment of fees and penalties. ... Read Full Answer >>
  2. What are the main kinds of annuities?

    There are two broad categories of annuity: fixed and variable. These categories refer to the manner in which the investment ... Read Full Answer >>
  3. What are the risks of rolling my 401(k) into an annuity?

    Though the appeal of having guaranteed income after retirement is undeniable, there are actually a number of risks to consider ... Read Full Answer >>
  4. How do I get out of my annuity and transfer to a new one?

    If you decide your current annuity is not for you, there is nothing stopping you from transferring your investment to a new ... Read Full Answer >>
  5. Are Cafeteria plans exempt from Social Security?

    Typically, qualified benefits offered through cafeteria plans are exempt from Social Security taxes. However, certain types ... Read Full Answer >>
  6. What are the risks of annuities in a recession?

    Annuities come in several forms, the two most common being fixed annuities and variable annuities. During a recession, variable ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  2. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  3. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  4. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  5. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  6. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!