Professional footballers, like most elite athletes tend to have a relatively short playing career. In that time, they stand to earn a considerable amount of money, however, without proper financial planning advice, they run the risk of running out of money within their lifetime.

A statistic that is widely used is that an estimated 40% of professional footballers go bankrupt within five years of retirement and many more struggle financially later in life.

Lifestyle

The key reason for experiencing financial difficulty in retirement is lifestyle. A professional footballer, when they retire, is likely to be in their early thirties, perhaps with a young family and, in all likelihood, funding an expensive lifestyle.

When their playing career has finished, the retired footballer needs to generate an income from their accumulated capital in order to fund their lifestyle. However, without proper financial planning, they may not have sufficient capital to do this.

Many retired players face additional pressures:

According to a Telegraph article, one in three ex-players are likely to get divorced putting huge pressure on their finances.
Many players face physical and emotional problems once they have retired. Some players liken the loss of their playing career to a bereavement.

Financial Planning

Financial planning needs to start early in a player’s career and this needs to be focused on financial education so that solid financial foundations can be laid. This will largely involve a savings strategy so that the young player can start to accumulate wealth for later life.

Although this needs to be regularly reviewed, it can be relatively light-touch as the player focuses on their playing career.

Later in a player’s career, perhaps in their late twenties or early thirties, there needs to be a discussion around what retirement might look like and what the journey to retirement might entail.

For example, a player coming to the end of their career might be forced to retire due to injury. They may have a contract that expires and isn’t renewed. They may decide to play in a lower league for a few more seasons earning a reduced salary.

Once a footballer has fully retired, they may not be able to afford a luxurious lifestyle and this needs to be addressed. It is surprising how many ex-players believe they can continue to live their current lifestyle once their income has ceased!

Financial planning can help identify what level of lifestyle a footballer can fund with the capital they have accumulated.

There also needs to be a discussion around what the next chapter of their life might look like. A professional footballer will have acquired and developed many transferable skills such as discipline and consistency which are highly attractive in a future career which could involve:

Broadcasting or sports management.
Coaching or management roles.
Media and brand management.
Business and venture capital.

Having peace of mind around their finances means that the player can focus their energy on developing the skills to forge a new career once their playing days are over.

The Big Questions

Financial planning can also play a crucial role in answering the big questions such as:

What do I want my life, post-retirement, to look like?
How much can I comfortably spend without running out of money?
How can I ensure that my money is invested appropriately?
How can I ensure that my family is taken care of should anything happen to me?

Financial planning can help the player understand their current financial position and what action needs to be taken to ensure they can lead the lifestyle they want in the future.

It is important to highlight that financial planning is largely about making sensible financial decisions, it doesn’t involve making risky investments with a promised return that is too good to be true or taking on dubious tax planning strategies!

Trusted Advisers

In order to plan appropriately, a professional footballer needs to surround themselves with trusted advisers who will act in their best interests. These should include a financial planner, a lawyer and a tax adviser.

By working together, an appropriate financial planning strategy can be put in place ensuring that tax is legitimately minimized and investments appropriately managed.

Conclusion

By planning early and surrounding themselves with trusted professionals, a professional footballer has every opportunity of achieving a successful retirement once their playing days have come to an end and enjoying a comfortable lifestyle for the rest of their lives.