Most people earn their money gradually over 40 years. Professional athletes earn the majority of their money in the sport during a few seasons, and have to keep that pay for the next 50 seasons. A financial advisor for pro athletes works around these realities: substantial income can come for a limited amount of time, income may be subject to taxes in other states, and a career can be brought to a close by an injury. Windfall Advisors is a fee-only fiduciary firm that helps athletes in the NFL, NBA, MLB, and more turn their high-earning years into long-term security.
Why athletes need a different kind of financial plan
High pay alone doesn’t protect anyone. According to the study, 15.7% of drafted NFL players from 1996 to 2003 went bankrupt 12 years after retiring. More surprisingly, people who had longer and more lucrative careers were just as likely to become bankrupt as those with shorter careers. The problem usually isn’t how much an athlete earns. It’s planning for an income pattern few advisors are used to.
A short, front-loaded career
Your highest-earning years may come in your twenties, with no guarantee of a next contract. Every financial decision has to assume the income could stop sooner than expected, and that what you save now needs to support decades of living afterwards.
Taxes in every state you play
Most states with an income tax charge visiting athletes on the share of income earned in that state, often based on game and practice days. That means filing returns in many states each year and claiming credits so the same income isn’t taxed twice. Where you live, and where your team plays, can change your take-home pay noticeably.
Uneven, complicated pay
NFL players, for example, are typically paid in weekly game checks during the regular season, with nothing in the offseason. Signing bonuses, roster bonuses, incentives and guaranteed versus non-guaranteed money all affect when cash arrives and how it’s taxed. Without a cash flow plan, a big contract can still leave you short in the spring.
Pressure from every direction
Once you have new wealth, you receive invitations from relatives and friends, offers of investment opportunities, and outright scams. It’s way easier to say no to the investments when there’s a clear plan, with fixed amounts of giving and a process in place to evaluate which ones to be part of.
How we help
Our wealth management for sports professionals covers the full picture, coordinated with your agent, attorney and CPA.
Cash flow and budgeting
We build a spending plan around how you’re actually paid, so you have money through the offseason and a clear picture of what you can afford long term.
Tax planning
We work with your CPA on multi-state filings, the timing of bonuses, and how endorsement income is structured. Endorsement and appearance fees are usually self-employment income, which opens the door to retirement plans like a solo 401(k) that salary alone wouldn’t allow.
League benefits and retirement savings
Leagues offer benefits that are easy to underuse. The NFL, for instance, has a savings plan where teams can match player contributions two-for-one, as well as an annuity program. We make sure you’re taking full advantage of what your league provides before building on top of it.
Investing for a long horizon
Your portfolio needs to fund a retirement that could start at 30 and last for decades. We focus on diversified, low-cost portfolios sized to your goals, and we keep enough in cash and short-term holdings to cover the years ahead. We don’t chase restaurant deals or private ventures pitched by people in your circle.
Protection
Career-ending injury and disability coverage and umbrella liability policies provide protection for what you’ve earned, whether it’s on or off the field.
Estate and legacy planning
Wills, trusts and a plan for supporting family and causes you care about, set up early rather than after your career ends.
Life after sport
Whether you want to start a business, go into broadcasting or coaching, or step away entirely, we plan your finances so the next chapter is a choice rather than a necessity.
Different leagues, different planning
Every sport has its own pay structure, and good financial advice for sports professionals starts there. An NFL financial advisor needs to plan around short average careers, limited guaranteed money and weekly in-season pay. An NBA financial advisor deals with longer guaranteed contracts, larger endorsement income and more international exposure. MLB players often face years of minor league pay before a major league contract, and players in global leagues may also deal with foreign tax rules. We tailor the plan to the economics of your sport and your contract.
How to choose a financial advisor as an athlete
Athletes are frequent targets for bad advice and fraud, so it pays to check carefully. Before you hire any professional athlete financial advisor, make sure they:
- Are a fiduciary at all times, legally required to put your interests first
- Are fee-only, so they don’t earn commissions on products they sell you
- Keep your money at an independent custodian in your name, so the advisor can’t withdraw it
- Have a clean record you can check on the SEC’s Investment Adviser Public Disclosure site
- Explain fees and investments in plain language you understand
Be wary of anyone who asks for broad power of attorney, wants your money moved into accounts in their name, or offers guaranteed returns. Our guide on what is a fiduciary advisor explains why the fiduciary standard matters.
Frequently asked questions
When should an athlete hire a financial advisor?
Ideally before signing your first professional contract, so your accounts, taxes and spending plan are set up correctly from the first paycheck.
How is a financial advisor different from my agent?
Your agent negotiates contracts and endorsements. A financial advisor plans and manages what happens to the money afterwards. The two roles should work together but stay separate.
Do you work with athletes outside the NFL and NBA?
Yes. We work with professional athletes across leagues, and with others whose income comes in large, uneven bursts, like entertainers.
Plan for life after the game now
Your career will end at some point, but your financial security doesn’t have to end with it. If you’d like to work with a fiduciary financial advisor who understands the sports & entertainment world, Windfall Advisors can help. Get in touch for a confidential conversation.