Whether it’s Olympic gold medalist Michael Phelps or women’s soccer legend Alex Morgan, athlete retirement news is always front and center. These athletes are taking a big step into the next phase of life and want to make sure they’re prepared for whatever comes their way.
Athletes often have to spend thousands of dollars for elite coaching and equipment while sacrificing employment opportunities to train around the clock. They’re also subject to significant risks like major injuries and even bankruptcy that can impact their careers and personal lives. Having proper financial planning can help athletes get ahead of potential risks and protect their income in the event of a career-ending injury or bankruptcy, says Wally Chapman, divisional director at RBC Wealth Management-U.S.
While some athletes, such as swimmer Michael Phelps, have made early retirement a career goal, many retire on their own terms and at the end of an impressive career. The key is to stay connected with sport peers, parents and loved ones so they can support the transition, advises Chapman.
For those who do decide to retire, it’s important to make that decision in a procedural manner, suggests Probert and Crespo (2015), with plenty of time to adjust to their new lifestyle without the competition. Ideally, they’ll take on other activities that will bring them joy and keep their mind and body active. In addition, it’s a good idea to save and invest early on to build a pension pot that can grow and provide returns.