Apparently, even multimillionaires need to be forced to set money aside for retirement.
Check out these numbers on what NBA players make:
- Players make an average of $5.15 million per year
- The median salary is over $2 million
- Kobe Bryant, the NBA’s highest-paid player (according to HoopsHype) makes just under $28 million per year
- The minimum salary for a rookie is just shy of $500K, and
- The minimum salary for a 10-year veteran is $1.3 million.
Yet, 60% of NBA players are financially insolvent within five years of leaving the league.
Result: The NBA is now forcing its players to save for retirement.
As part of the new 10-year collective bargaining agreement between the NBA and its players union that ended the lockout in November, the league will now invest 1% (roughly $34 million last season) of “basketball-related” income into an annuity for players’ retirement.
Players will also be forced to surrender 5% to 10% of their salary for retirement, unless they opt out of the plan.
Most retired players won’t be able to access retirement funds until age 50, but some will be able to take an early pension at age 45, according to the San Francisco Chronicle.
Notable NBA players with financial difficulties
Some of the most notable players to have experienced financial difficulty after their careers ended:
- Scottie Pippen
- Allen Iverson
- Antoine Walker
- Latrell Sprewell, and
- Dennis Rodman.
Each made tens, and in some cases hundreds, of millions. But each has now suffered a very public fall from grace.
A Georgia judge recently garnished Iverson’s funds over an outstanding jewelry bill that totaled nearly $860,000. He earned more than $154 million during his career.
Walker played for 12 years and made more than $110 million. He was recently forced to sell his NBA championship ring after finding himself bankrupt. It has been reported that he supported 70 people during his career.
The NBA has the highest average player salary of the four major professional sports leagues — MLB ($3.34M), NHL ($2.4M) and NFL ($1.9M).