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When do NBA players get their pensions?

When you take away the glitz and glamor of the game, being a professional NBA player is a job. And every job has an end: no NBA player has played forever. Retirement looms for every player, be it by their own choice, or worse, by circumstances out of their control. Like with any profession, NBA players need to prepare for a life after their career is over, especially when it comes to their finances.

When do NBA players get their pensions? A pension is an amount of money given by an employer to an employee after retirement; in this case, the NBA provides pension to NBA players after retirement. NBA players can opt in to their pension fund at the age of 45 years old at the earliest, providing they have retired. Once they have opted in, players will receive monthly payments for the rest of their life, and depending on different factors, other benefits as well. The recommended age to opt in to the NBA pension fund is at 62 years old, which allows the retired player to receive maximum payments.

Which NBA players are eligible for a pension?

The requirement for a retired NBA player to receive a monthly pension payment is to have had at least three years of service in the NBA. In the favor of players, a year of service means that the player must have been contracted for at least one game in a season, regardless of if their status was active or inactive. An NBA player with at least 10 years of service receives more in pension payments and additional benefits.

What are the benefits of a pension for NBA players?

A retired NBA player with 3 years of service in the NBA, if he opts-in at the recommended age of 62 years old, will receive approximately $57,000 in pension payments annually. He will also receive educational benefits, where should he choose to pursue a college degree, the NBA will reimburse up to $33,000 in tuition annually. The retired NBA player will also receive lifetime healthcare.

A retired NBA player with 10 years of service in the NBA, if he opts-in at the recommended age of 62 years old, will receive approximately $215,000 in pension payments annually. He will also receive the educational benefits aforementioned. In addition to the lifetime healthcare benefits, the retired player’s spouse and children will also receive lifetime healthcare benefits.

Players may choose to opt-in to the pension program earlier than age 62 (the minimum age requirement is 45 years old), but the payment amount decreases significantly the earlier the player opts in.

What recent change did the NBA make to their pension program?

The NBA pension program was first set up in 1965, in the early days of the league. This pension program, however, did not include ABA players (the ABA was a professional basketball league that merged with the NBA in 1976). After much criticism was aimed at the NBA regarding the lack of pension provided to ABA players, many of whom significantly struggled since they retired, the NBA and NBAPA came to an agreement in July 2022 to provide 115 ABA players with at least 3 years of service with a lifetime pensions of just under $4,000 each month.

What other ways do NBA players support themselves financially after retiring from the NBA?

For most NBA players, the pension fund is not available for them immediately post-retirement, since the earliest a player can opt in is at 45 years old (no NBA player has reached or exceeded that age at time of retirement). Therefore, there is a period of at least few years where a retired NBA player is not receiving any money from the NBA. Many players have most probably saved a portion of their career earnings, although it’s not guaranteed, and can therefore live off of that money until they choose to opt in for the pension.

However, many NBA players have either set up revenue streams for themselves already or choose to pursue new ones. With the level of money they earn throughout their career, NBA players, especially when they are still active, have a plethora of investment opportunities to partake in. Many do choose to pursue business interests when they are playing, and turn their focus onto them full-time once they retire, and allow their returns on investment to fund their lifestyle.

NBA players also get other jobs: they’re not retired from employment, after all. Many choose to stay in the world of basketball, by becoming coaches, front office members, or TV analysts. Because of their experience, level of basketball knowledge, and reputation, newly-retired NBA players are well positioned to pursue new careers in the basketball sphere, or maybe even in a different industry entirely.

NBA players, especially the bigger stars, can also expect to receive endorsements and sponsorships once they have retired, in addition to any they may have had in their playing career. Newer endorsements include partnerships with companies/industries that they may not have had permission to while they were still in the NBA, but are free to enter to now. These sponsorships and endorsements bring in a sizable amount of revenue for retired NBA players.

A great example of a player who has set himself up very well financially after retirement is Shaquille O’Neal. He has a multitude of investments and businesses that he owns or has a stake in. He is also a TV analyst on the beloved Inside the NBA show, where he is one of the main attractions. He also has many sponsorships and endorsements, and his stature as a former star and great media personality continues to open many doors for him.

The NBA has one of the pension programs across various sports leagues, and probably one of the best pension programs anywhere. It wasn’t always like that, but with the hard work of the NBA Players Association, and the willingness to cooperate from the NBA, the pension program has made huge strides in protecting and aiding the players who paved the way for the NBA to achieve, sustain, and grow its success.