Essential Financial Tips for Athletes

Securing Financial Future

As the 2024 Summer Olympics in Paris come to a close, athletes from around the world have showcased their talents on the international stage, achieving remarkable feats and earning substantial accolades. Despite their success and the financial rewards that come with it, athletes’ peak earning potential is often short-lived, typically occurring early in life.

Post-retirement, many athletes face financial uncertainty, with numerous examples of sports stars declaring bankruptcy, quite simply because they have not put in place a financial plan for their retirement from sport or have not received regulated financial advice during their sporting careers.

Here I have outlined some considerations for athletes looking to have financial security beyond their sporting career:

Long-Term Savings and Investments

Athletes should prioritise saving and investing a significant portion of their income. Diversifying investments across various asset classes can provide stability and growth over time, ensuring a steady income post-retirement. Often, this is not done early enough in an athlete’s career, and the earlier these savings start, the easier it is to maintain as their income grows.

Budgeting and Expense Management

It’s crucial to maintain a disciplined budget. Athletes should avoid the temptation to overspend during their peak earning years and plan for long-term financial security by controlling lifestyle inflation.

Tax Planning

With high incomes can come a high tax liability. Athletes should work with professionals such as financial advisers and accountants to implement strategies that minimise tax burdens and maximise savings, including taking advantage of their annual allowances in investment wrappers such as ISAs and pensions.

Insurance and Risk Management

Given the physical demands of sports, athletes should have comprehensive insurance coverage to protect themselves, their income, and their family’s lifestyle.

Estate Planning

Those athletes who have managed to navigate their finances successfully into their later years may then turn their attention to ensuring that wealth is protected and passed on to their loved ones. Athletes should establish wills, trusts, and other estate planning tools where appropriate to manage their assets and provide for their families.

By taking these steps, highly paid athletes can secure their financial future, ensuring that their wealth lasts well beyond their playing days. Working with a skilled financial adviser who understands the unique challenges and opportunities athletes face is essential in crafting a robust financial plan.

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