Financial Checklist for Athletes After Signing Their First Professional Contract (2026 Edition)
What happens the moment you get the call that a team is selecting you in the draft? For most athletes, the honest answer is nothing planned at all. Here is what usually happens. The player signs the contract; 30-45 days later, they see a number larger than anything they have ever seen direct deposited into their account, and then it sets in as they ask themselves, "what now?" Players spend years perfecting their swing and zero hours thinking about taxes, insurance, or what happens to that money once the season ends.
This is the reason the financial checklist for athletes exists. Whether you just got drafted, called up, or signed your first extension deal, the choices you make in the next few months set the tone for the rest of your career, and often for the rest of your life. In this blog, I am going to walk through exactly what to do first, from building the right team around you to protecting the paycheck you worked your whole life to earn.
Build the Team Before You Need It
You would never take the field without a coaching staff. Don't manage a seven- or eight-figure contract without the financial equivalent.
At this stage of your career, you most likely already have your agent in place. So what else should you be thinking about as you build your team? At minimum, that means a fee-only financial advisor acting as a fiduciary, meaning they are legally obligated to work in your interest rather than sell you products. It means a CPA who has actually handled multi-state athlete returns before, because the jock tax rules that apply to you don't show up in most general tax practices.
Something to keep in mind as you go through this vetting process is transparency on fees. Ask directly how someone is compensated before you ask what they recommend.
Know What You Actually Take Home
The contract number that ran in the headlines is not the number that hits your account, and the gap between the two catches almost every rookie off guard. Between federal and state income tax, agent fees, and union dues, our real take-home pay is often well under half of the reported figure.
Before you make a single spending decision, build out the full picture:
1) Gross Contract Value: the number that ran in the press release
2) Projected Tax Liability: federal, state, and city obligations based on where you play and live
3) Fees and Withholdings: agent commissions and union dues
4) True Net Income: the number you can actually plan a life around
Signing bonuses are frequently taxed on a different schedule than salary, so get the timing mapped out early rather than discovering it at filing season.
Set Up the Right Accounts Before the Money Moves
Where your money physically sits matters as much as how much of it there is. Before a signing bonus or first paycheck arrives, get the structure in place so every dollar has somewhere to go.
A high-yield savings account or money market fund for your emergency reserve, separate from your everyday checking account
A dedicated tax reserve account, funded either upfront from a signing bonus payment or with a percentage of every check; we want to make sure we have money proactively allocated so a tax bill never catches you short come April 15.
An LLC or loan-out entity, if you earn meaningful endorsement, appearance, or licensing income outside your playing contract, since business income and player-contract income are often best kept structurally separate
Put Basic Estate Planning in Place Early
Most 18-24-year-olds don't think about estate planning. Most 18-24-year-olds also aren't sitting on a seven-figure asset base with a public profile attached to it. You are, which changes the math.
A will, so your assets go where you intend rather than through your state's default rules
A revocable living trust, which can help move assets to your beneficiaries without going through probate and keeps the details of what you own out of the public record
A power of attorney and healthcare directive, so someone you trust can act on your behalf if you are ever unable to
Updated beneficiary designations on any league pension, group life insurance, and investment accounts, since these override what your will says
A guardianship designation, if you have children
Put Time to Work
The single biggest advantage an 18-24-year-old athlete has over almost every other high earner is time. Money invested now has three or four decades longer to compound than money invested at the tail end of a career, which is exactly the opposite of how most professionals experience their earning years.
Once your accounts and reserves are structured, this is where your advisor should start building a diversified portfolio around your actual timeline rather than whatever is trending that quarter. It's also worth knowing exactly what your service time earns you.
In MLB, a single day on an active roster locks in lifetime health coverage, and 43 days of service vests you into the pension plan at roughly 2.5% of the maximum benefit, with every additional 43 days adding another slice toward a full payout at 10 years of service. The 2026 league minimum salary is $780,000, and figures like these are set by the current collective bargaining agreement, which is scheduled to expire on December 1, 2026, so treat any specific number as subject to change once a new deal is in place.
If you want the fuller framework, our Guide To Retirement Planning for Professional Athletes covers the details league by league.
Build a Budget That Survives a Short Career
A budget is not a constraint on a professional athlete's life. It is what keeps a five- or ten year earning window from becoming the only good financial years you ever have.
Automate savings and investing before the money reaches your checking account, set a fixed share of net income for discretionary spending, and revisit the whole thing at least once a season, because your income and obligations will not stay static.
If you want the fuller framework, our Guide to Financial Planning for Professional Athletes walks through how we build these plans with clients from year one.
Expect the Pitches, and Say No More Than You Say Yes
Once your name is public, you become a target for people who are far more interested in your money than your career. Family members will ask. Old friends will show up with a business plan. Strangers will find a way into your inbox.
Run everything of consequence through your advisor and your attorney before you commit to it, and treat any pitch you don't fully understand as a pitch to decline. Saying no early protects the relationships that matter more than it damages them.
What Next?
Are you working from an actual plan, or figuring this out contract by contract as it comes? Most athletes never had anyone sit down and walk them through this.
That's the entire reason Moment exists.
If you want a second opinion on where things stand, or you're starting from nothing, schedule a call with a Moment Founder and let's put a real structure around what you've earned.
Get in Touch With An Advisor
Frequently Asked Questions
Here are some answers to questions I received frequently about this topic.
Are you a fiduciary?
Moment Private Wealth serves clients as a fiduciary 100% of the time.
Do I need to set up an LLC for my baseball income?
Not for your player contract itself, since that is W-2 income paid directly by your team. An LLC is worth a conversation if you earn meaningful income outside your contract, such as endorsements, appearances, or licensing.
How much of my contract is really going to taxes?
It varies by sport, by your state of residency, and by the states and cities where you compete, but the combined federal and state tax bill often surprises rookies who were only thinking about the headline number. Regular estimates should be run by your financial and tax team.
I already have an agent. Do I really need a separate financial advisor? Yes, and the two roles aren't interchangeable. Your agent negotiates contracts and endorsements. A fiduciary advisor manages the money once it arrives, including taxes, investments, insurance, and the long game. Neither one replaces the other.
How large should my emergency fund be compared to a typical recommendation?
Larger than what a standard financial plan would suggest, usually six to twelve months of expenses, because injuries, trades, and short career arcs make an athlete's income far less predictable than most professionals'.
Do I really need a trust, will, and an estate plan this early in my career? Yes. Estate planning is not just for later in life. It matters most when you have a meaningful asset base and, often, a family depending on you, which describes most professional athletes the moment they sign a first contract. A revocable living trust, will, updated beneficiary designations, and a power of attorney are worth putting in place early, not after your career winds down.
*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.
The article highlights an important financial gap many athletes face after signing their first professional contract: earning a large income does not automatically mean knowing how to manage it. Planning for taxes, insurance, budgeting, and long-term financial security should begin before the first major payment arrives. One useful takeaway is that athletes should build a support team that complements their careers while keeping their financial goals in focus. Even seemingly unrelated professional decisions, such as finding content writers near me, benefit from careful research and choosing people with the right expertise. The same thoughtful approach can help athletes make informed financial decisions and avoid costly mistakes during the early stages of their professional careers.