Did you know the National Football League has a retirement plan? Since 1993, the league has increased its commitment to its players' financial security post-career.
As an NFL player, you must understand all the frameworks to consider when navigating retirement as a professional athlete.
For NFLPA benefits, it starts with understanding the Bert Bell/Pete Rozelle NFL Retirement Plan. Here is what you need to know.
What benefits do players get?
How do players know if they are eligible?
What do players need to do to access those benefits?
What should players look out for?
There is a lot to focus on while on the field, but understanding the benefits you receive for being a part of the 53-man roster is just as important.
In this article, I am going to break down all the things players in the National Football League need to understand about the NFL Retirement Plan in 2024.
NFL Retirement Plan
Before we jump into the specifics of the benefits afforded NFL players, it is important to understand who is eligible.
Just because you sign a contract does not mean you receive the benefits of the NFL Retirement Plan.
You must earn a "Credited Season" first in order to be eligible.
So what is a Credited Season?
A Credited Season means you were on one of the following rosters for three or more regular or post-season games:
Active Roster
Inactive Roster
IR (Injured Reserve)
PUP (Physically Unable to Perform)
Similarly, if you are released injured or receive an injury settlement for 3 or more games, you earn a Credited Season.
From a Credited Season to Becoming Vested
Oftentimes, you will hear the phrase "Benefits for Vested Players."
Earning a Credited Season is the first step in being eligible for the NFL Retirement Plan. However, in order to be entitled to those benefits, you need to earn three or more credited seasons.
Simply put, three or more Credited Seasons means you are now "vested."
Think of it like levels to a game.
-First, you have to make the 53-man roster.
-Second, you have to be on said roster for 3 or more games.
-Third, you have to earn 3 or more Credited Seasons.
These Credited Seasons open the doors to the benefits negotiated under the NFL's Collective Bargaining Agreement (CBA).
Benefits for Vested Players
Now that you have met the requirements, what is included in the NFL benefits plan?
First, it is important to note that the benefits may vary depending on when you played and how many credited seasons you earned. Specifically speaking, if you played prior to 1993, these benefits will be different than for active players.
For active-active players the current benefits include:
Pension
Health insurance for 5 years once finished playing
Player Annuity Program
Capital Accumulation Plan
Tuition Reimbursement
Disability Benefits
Life Insurance
Health Reimbursement Account Plan (HRA)
401(K)
Severance
Former Player Life Improvement Plan
88 Plan - Health Reimbursement Plan for Vested Players with Certain Illnesses
There is a lot involved in each of the benefits above. Athletes need to work with a specialist in athlete wealth management.
In the rest of this blog, I am going to outline the four biggest benefits players receive in the NFL Retirement Plan:
NFL Player Annuity Program
NFL Second Career Savings Plan (401k)
NFL Player Severance Plan
NFL Pension Plan
NFL Player Annuity Program
One benefit afforded to players is the NFL Player Annuity Program.
Also known as the PAP, this is a deferred compensation plan.
In other words, it provides eligible players with additional retirement savings.
Here is how it works...
Money Is Put In: The club contributes money into an account on your behalf.
Money is Invested: The money is then invested and managed by investment professionals.
You Become Vested: After three or more Credited Seasons, you become vested. This means you are the full owner of the money and the NFL cannot take it back from you.
You Take the Money Out: When you are no longer an active player and age 45 or older, you can take out the money.
*Note: money withdrawn prior to turning 59.5 years could result in a tax penalty.
There are a few additional questions that need to be addressed.
How do I become vested in this program?
How much is the team contributing?
How do you become vested?
Essentially, you begin to receive contributions to the PAP after three credited seasons.
Once you are vested, no longer an active player, and at least 45 years of age, you are eligible to receive these payments.
It is important to keep in mind that if you defer payments, these payments must begin by age 65.
What is the team contribution?
The contribution varies by the years played in the NFL. For instance, players will receive the following amounts if they played from 2011-2020 and earned four or more Credited Seasons:
2011-2013 = $65,000 per year
2014-2017 = $80,000 per year
2018-2020 = $95,000 per year
Here are a few additional things to keep in mind.
Depending on the number of Credited Seasons you earn, you can have balances in two different accounts:
"Tax-Qualified (TQ) Account": Money is contributed "before tax," which means you pay taxes when you take the money out. This starts accruing after your second Credited Season.
*This is earned after 3 Credited Seasons or you are employed as a player at age 55
"Nonqualified (NQ) Account": Money is taxed in the year it is contributed and comes out tax-free. This starts accruing after you earn your fifth Credited Season
*You are always vested in the balance of a Nonqualified Account. It can never be forfeited
Additionally, it is important to understand how to take the money out.
Here are the four ways to do so:
Single Lump Sum - this is a one time payment for the entire balance.
TQ - available as soon as you are eligible
NQ - only after age 45
Partial Lump Sum - this means you receive payment of part of the balance.
TQ - available as soon as you are eligible
NQ - only after age 45
Installment Payments - this means you will receive the payments in equal installments.
TQ - available as soon as you are eligible
NQ - annual payments until you reach 45 (or a date of your choosing after that date)
Annuities - the balance is used to purchase an annuity from the insurance company.
If you have questions or want to take advantage of this benefit, you can call the NFL Player Benefits Office at 800.638.3186 or visit their website at NFLPlayerBenefits.com
NFL Second Career Savings Plan (401k)
One of the greatest benefits your employer can provide is a 401(k) plan.
In the National Football League, this is called the Second Career Savings Plan (401k).
This 401(k) is an asset that needs to be utilized.
In 2024, you can contribute $23,000 in “pre-tax” money into you 401(k) plan.
Outside of saving for retirement, this means you would receive a tax deduction for your contribution.
For example, let's say you make a salary of $1,000,000 in 2024 and contribute the max $23,000 into your 401(k) plan. Your taxable income is now $977,000 instead of $1,000,000. This means you have a potential tax savings of more than $8,500 if in the 37% federal tax bracket.
Additionally, the club will contribute to your 401(k) as an active, inactive, IR or PUP list player if you have two or more credited seasons (excludes practice squad players).
*Note: this excludes 2020-2023. What does this mean?
This means that the team you play for will contribute a "2-for1- match" to your account. In other words, for every dollar you contribute up to that $23,000 max, the club will contribute an additional two dollars into your account.
That is FREE MONEY!
Here is a breakdown of the matching contributions the NFL has proposed for the upcoming seasons:
NFL Player Capital Accumulation Plan (CAP)
If the 401(k) isn't incentive enough, the NFL has also created the NFL Player Capital Accumulation Plan (CAP).
This provides NFL players with additional saving opportunities for retirement.
Unlike the 401(k) where you can deposit your own money, your CAP account receives money only from team contributions.
The amount depends on the number of Credited Seasons earned.
Here is how it is broken down:
1 Year = $0 CAP Contribution
2 Years = $2,500 CAP Contributions
3 Years = $2,500 CAP Contributions
4 or More = $40,000 CAP Contributions *If you meet the requirements for 4 or more seasons, this amount will increase to $42,000 in 2026, $45,000 in 2027 & 2028, $48,000 in 2029 and $50,000 in 2030
NFL Player Severance Plan
Time is undefeated and your time as a player will come to an end. But the time you put into the sport can pay you back at the end of your career.
The NFL Severance Plan is a plan that benefits those players who are credited with a certain number of seasons in their football careers.
First, severance pay is the compensation an employer provides you at the end of your employment.
This is no different in the NFL. The National Football League pays you a lump sum payment at the end of your career.
You might be thinking...how much?
Well, it depends.
The number of Credited Seasons earned and the years you played will determine how much you receive.
Here is the breakdown:
1989-1992 = $5,000 per year
1993-1999 = $10,000 per year
2000-2008 = $12,500 per year
2009= $15,000 per year
2010 = $0
2011 = $15,000 per year
2012-2013 = $17,500 per year
2014-2016 = $20,000 per year
2017-2019 = $22,500 per year
2020-2023 = $0
2024-2025 = $35,000 per year
2026-2028 = $40,000 per year
2029-2030 = $50,000 per year
Ok, great. So when is the severance paid and how do I apply?
The severance is paid by the team you earned your last Credited Season with.
It is paid to you in a lump sum and sent to you on the last day of the calendar quarter when you are no longer with the team.
Notify your Plan Administrator at 800.635.4625 if interested in applying.
One other important thing to remember...
For income tax purposes, the severance pay is included in taxable income when distributed.
NFL Pension Plan
Additionally, the NFL Player Retirement Plan provides a pension.
Generally, this begins between the ages of 55 and 65.
So what are your benefits? Again, it depends. There are three factors considered:
How many benefit credits you have earned
When you choose to begin receiving retirement benefits
The form in which you choose to receive your retirement benefits
To start, you earn a benefit credit for each Credited Season you are awarded.
*Remember, you need 3 or more Credited Seasons to be eligible
I have outlined this for you below:
Credited Seasons Benefit Credit
1982-1992 255
1993-1994 265
1995-1996 315
1997 365
1998-2011 470
2012-2014 560
2015-2017 660
2018-2020 760
After age 55 (or later if deferred), you receive a monthly amount. That amount depends on multiple factors including:
Your Benefit Credits
Years of Service
Average Salary
The average NFL pension is ~$43,000 per year.
Next, you decide when to receive the retirement benefits.
This can be done the month beginning after your 55th birthday or can be deferred. If you do defer receiving the retirement benefit, the amount of your monthly benefits can increase substantially.
What Next?
Making it to the NFL is a feat in and of itself. Why not take advantage of the benefits afforded you?
All too often, we see athletes unaware of the benefits they have earned.
At Moment Private Wealth, we make sure you are up to speed on these benefits.
If you are in the National Football League and want to better understand the NFLPA benefits, schedule a call with a Moment Founder.
Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor.
Get in Touch With An Advisor
Frequently Asked Questions
Here are some answers to questions I received frequently about this topic.
How does a player qualify for the NFL Retirement Plan? A player must have earned a minimum of three "Credited Seasons" to be eligible.
Have I earned a Credited Season? Players need to be on an active roster for three or more regular or post-season games to earn a "Credited Season."
How do I become vested? All players on the active, inactive, IR, or PUP list for three or more "Credited Seasons" are considered vested.
What age can players take the NFL pension? Players can start receiving their full pension at the age of 55. If deferred until 65, the benefit is significantly increases.
Is there a 401(k) match provided by the NFL? Yes! If a player contributes to their 401(k), the NFL will contribute a "2-for1- match."
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*Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.
