If NBA players can’t learn to save for retirement then the league will just have to do it for them.
That’s part of the deal between the players union and the NBA that ended the lockout back in November, Bloomberg reports. Roughly $34 million, or 1 percent of basketball-related income from last season will now be invested in an annuity for players’ retirements, according to the agreement. Next season, 5 percent to 10 percent of players’ salaries will be put toward their financial security after they leave the league.
The move couldn’t come soon enough, considering NBA players’ long history of financial woes. Sixty percent of NBA players become finanicially insolvent within five years of leaving the league, Sport Illustrated estimated in 2009.
The roots of the financial trouble are varied, but include overspending, poor investments, family trouble or supporting too many hangers-on. For example, Antoine Walker, who was forced to sell his championship ring due to financial woes, is rumored to have supported around 70 people during his career.
Other famous ballers who've gone broke or close to it, including former Knicks player Latrell Sprewell, and, more recently, famed rebounder Dennis Rodman. Former NBA sensation Allen Iverson is apparently not doing so well either after a Georgia judge garnished his funds in February over an outstanding jewelry bill worth $860,000.
Player agent Keith Glass told Bloomberg that the retirement funds are a “good idea” for NBA players since they “force you to save something,” but it’s not the only league to offer players financial guidance. The NFL, for example, has league-sponsored asset managers after facing widespread player-bankruptcies. However, only around 50 percent of players actually use them, The New York Times reports.