NBA Player Pensions
Published on
You can get a basketball for $30, or this Shawn Kemp signed one for $20.
While some NBA players are big balling, the average career length in the league is 4.5 years. The minimum salary for players with 0 years experience is $1,157,153 (0.8% of the cap) but having less than 5 years is a super short amount of time to earn money for the rest of your life, especially when you consider taxes, agent fees, and the pressure to live rich. For every LeBron racking up a billion, there's a Shawn Kemp signing basketballs for 20 bucks. But what retirement benefits does the NBA offer? And how do they compare to your typical corporate job?
NBA Pension Amount
Players are paid $1k for every year they play in the league under the pension plan. But in order to be vested, they must play at least 3 years (you made it, Anthony Bennet!). Two-Way players' accrue years if they spend more than 50% of the games that season. Players usually can start collecting at age 62. Starting in February 2024, though, players have the option to start collecting after turning 45, albeit with a reduced payment.
How much do players contribute? Nothing! The responsibility for funding the pension plan lies solely with teams.
Do NBA players have 401(k)s?
Yes, they do! A 401(k) is a legal statute, so it doesn't vary much from the one you may have at work. They can also get matches from their teams, if the NBA Players' Association requests it.
What other benefits do NBA players have?
The Post-Career Income Plan
NBA players have a third retirement plan set up by the league, the Post-Career Income Plan. 1% of Basketball Related Income (BRI) is set aside each year to fund the plan, which then provides annuities for players once they retire. You can think of an annuity as a guaranteed paycheck for life.
Tuition Reimbursement
Players get $41,667 in tuition reimbursement per year, and a lifetime benefit of $125k. Looks like Jaylen Brown is gonna have to pay for that Harvard MBA himself.
Military Duty & Travel Reimbursement
One of the things you learn when you read the Collective Bargaining Agreement (CBA) is that the NBA plans for EVERYTHING, even including military service of NBA players. Players are entitled to receive their salary if called to service. In addition, they can get reimbursed for traveling to their base if they are in the reserve component of one of the branches. I'd love to imagine Kevin Durant crew chiefing it up!