7 Best & Worst Retirement Plans in Pro Sports

Not all pro athletes are good enough to be financially secure through the earnings of their playing contracts alone

This Major League Soccer player resting at the end of a game better hope he's saving for retirement. (Photo: AP) This Major League Soccer player resting at the end of a game better hope he's saving for retirement. (Photo: AP)

Elite athletes, from the time their special abilities become apparent, are lionized. As they move from high school to college, the benefits grow.

And if they hit it big in the professional ranks, the money can be almost too much to comprehend. A sense of entitlement can set in for some. Sometimes (like Denny McLain or Mike Tyson) the money is frittered away on material goods, bad investments or even on creating charitable foundations that don’t work out as they were intended. From the WNBA to the NFL, players often have trouble dealing with riches.

Then there are the average athletes. Sure, they make a lot more money than their peers at the same age, but their careers end all too soon and the money is turned off.

(Check out 8 of the Worst Financial Meltdowns by Athletes on ThinkAdvisor.)

And after their athletic careers are over, there are years to wait before retirement benefits kick in. That got ThinkAdvisor to wondering just what sort of retirement plans are in place for the various U.S. professional sports leagues.

We found great variation in the benefits paid as well how quickly a former athlete can qualify. Check out 7 Best & Worst Retirement Plans in Pro Sports, listed from the least benefits to the most:

Luke Guthrie of the U.S. tees off at the BMW Masters golf tournament in Shanghai, China. (Photo: AP)

7. PGA Tour

Plan Type: Incentive based

Professional golf is an individual sport and that doesn’t change when it comes to a retirement plan. Money is deposited in retirement accounts based on how well golfers do in tournaments. For those who play fewer than 15 events a year, money can be withdrawn beginning at age 50. Those who play 15 or more events on the Champions Tour must wait until they are 60.

New England Revolution's Kelyn Rowe (11) calls for a penalty against the Columbus Crew. (Photo: AP)

6. Major League Soccer

Plan Type: 401(k)

The plan, which is voluntary on the part of athletes, includes player contributions up to the IRS limit of $17,000 per year. Team contributions are capped by law at $50,000 per year and equal 3.5%. Salaries range from about $35,000 to more than $4 million.

Atlanta Dream guard Jasmine Thomas (5) driving to the basket against Minnesota Lynx during the WNBA Finals. (Photo: AP)

5. WNBA

Plan Type: 401(k)

The league, established 15 years ago, offers a defined contribution retirement plan. Players are allowed to defer the maximum amount of salary allowed by the IRS. In addition, employers contribute up to 25% of the amount of employee deferrals. Other team contributions include: 2% of base salary for a player with two years of experience; 3% for those with three years; and 4% for those with four years or more. Minimum salaries rise from $37,950 for players in the league two years to a maximum of $107,000.

Edmonton Oilers Luke Gazdic, left, scuffles with Los Angeles Kings Jordan Nolan. (Photo: AP)

4. NHL

Plan Type: Pension

Skating in one game earns a player enrollment in the hockey league’s retirement plan, which switched from pension to defined contribution in 1986. Full retirement benefits can be drawn at age 45, and eligibility for reduced payments starts at 10 years earlier. Taking the ice in fewer than 400 games earns $7,760 in contributions per year. Playing more than 400 games earns $11,640 in team contributions.

St. Louis Rams Tavon Austin tackled by Seattle Seahawks Brandon Browner on Monday Night Football. (Photo:AP)

3. NFL

Plan Type: Pension, 401(k), Annuity

Players are vested after three seasons in the NFL. Pension benefits are calculated using credits earned for each season played. If a player has five years of service time, his annual pension at age 55 would be $28,200. The 401(k) plan boasts a team match that is twice the player contributions once they have two years of credited time. The maximum team contribution will rise from $24,000 to $28,000 over the next seven years. Players who last four seasons or more are also eligible for an annuity.

Miami Heat LeBron James goes to the basket as Washington Wizards in preseason NBA game. (Photo: AP)

1. (tie) NBA

Plan Type: Pension, 401(k)

The NBA has enjoyed three decades as one of the nation’s three most popular sports leagues. TV money has flowed and retirement benefits reflect that. Earning full vesting rights after three years of service in the league, players can begin drawing their pension at age 50. The annual benefit, for someone with the minimum service times, would be $19,160. With a decade of playing time, the payment rises to $60,000. But patience has its rewards. At age 62, those with three years in the league would get $60,000 and those with 10 years, $200,000. Players are also eligible to participate in a 401(k) plan, in which team contributions can be greater than player deferrals.

Boston Red Sox David Ross is tagged out by St. Louis Cardinals catcher Yadier Molina in the World Series. (Photo: AP)

1. (tie) Major League Baseball

Plan Type: Pension

Players are fully vested after 10 seasons and at age 62 would receive annual payments of $200,000. Players with less playing time are entitled to smaller payments. Under the current collective bargaining agreement, owners make an annual contribution of $184.5 million to the pension fund.

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