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Pension plans used to be the most common retirement plan. Companies would pay its employers a salary with the promise of a pension once they retired. But the pension plan is becoming less seen today. The National Football League is one of the few employers that continues to include the pension benefit as a part of its retirement plan. In this blog, I am going to break down all the things players in the National Football League need to understand about the NFL Pension Plan in 2026. NFL Pension Plan "A pension plan...what is that?" Pension plans are becoming an afterthought. But the NFL has made it a priority to include in the NFL Retirement Plan. A pension plan is a retirement plan that provides income to employees after they retire. In simple terms, an employee receives a specific payment amount when they retire. So how does this work for NFL players? It starts with earning 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 Earning a Credited Season is Step 1. Step 2 is becoming "vested." In order to be entitled to the NFL Pension Plan, a player must 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). NFL Pension Plan Specifics As an eligible player, it is important to understand the NFL Pension Plan specifics. Again, in order to be eligible for the NFL Pension plan, a player needs to have earned three or more credited seasons. To start, the NFL Pension Plan generally begins when a player reaches between the ages of 55 and 65. Once a player reaches retirement age, there are three factors impacting a player's pension benefits: How many benefit credits a player has earned When a player chooses to begin receiving retirement benefits The form in which a player chooses to receive his retirement benefits Benefit Credits In the NFL, each season a player plays for three or more regular or post-season games, they earn a credit towards their pension amount. Outlined below are the credits earned for each credited season a player is awarded: *Remember, you need 3 or more Credited Seasons to be eligible Credited Seasons Benefit Credit 1982-1992 255 1993-1994 265 1995-1996 315 1997 365 1998-2011 470 2012-2014 560 2015-2017 660 2018-2019 760 2020-2030 836 These credits are then used to determine how much a player may receive for their pension. The average NFL pension is ~$43,000 per year as of 2023. When Is A Player Eligible For a Pension? As mentioned above, the NFL Pension Plan typically begins when an eligible player turns 55. However, these benefits can be paid at two different times: Normal Retirement Deferred Retirement Normal Retirement begins on the first day of the month beginning after a player turns 55. Deferred Retirement can begin on the first day of the month after a player reaches the age of 55. However, in deferring this benefit, the amount of a player's monthly benefit will be increased. This is because a player will be receiving a pension for a shorter amount of time. Regardless of when an eligible player chooses to receive his pension, he must be at least 55 years of age. How The Pension Benefit Is Paid When it comes to receiving the pension, a player has multiple options. These include: Life Only Pension Qualified Joint and Survivor Annuity Pension Life and Contingent Annuitant Pension Life and Ten-Year Certain Pension Life Only Pension The Life Only Pension is the most common pension plan chosen by NFL Players. This pension will provide equal monthly payments to an NFL player for their lifetime. Once a player passes away, this benefit ends regardless if a player has a family. Qualified Joint and Survivor Annuity Pension If a player is married, the Qualified Joint and Survivor Annuity Pension is most common. This plan gives a player a reduced monthly pension during the player's lifetime. However, when a player dies, the surviving spouse will receive 50% of the pension. Life and Contingent Annuitant Pension The Life and Contingent Annuitant Pension plan is similar to the Qualified Joint and Survivor Annuity. It pays a reduced monthly pension during the lifetime of a player. There is one difference. The amount depends on the beneficiary's expected lifespan. It also depends on the percentage the beneficiary will receive. A player can choose the percentage of the pension paid to the beneficiary. That can be anywhere from 1% to 100%. It is important to keep in mind if the beneficiary is not your spouse, parent, child, or dependent, the value of the benefits payable may change. Life and Ten-Year Certain Pension Similar to the other pensions, this option provides monthly payments for life. The difference with this plan is that 10 years of payments are guaranteed. If a player passes away young, the beneficiary will continue to receive the same monthly payments during the guaranteed time. Pension Protection for Family While it is never in the plan, it is important to understand what happens to a player's pension benefit if he passes away before reaching retirement age. The NFL continues to emphasize the importance of taking care of the family. With that, the NFL has created a Widow's and Surviving Children's Death Benefit. While not a pension plan, it does provide a pre-retirement death benefit to the spouse. The typical monthly death benefit for the widow and surviving children is $9,000. The $9,000 is paid to the family for the first 48 months following a player's death. This amount decreases to 50% of the player's benefit credits after those 48 months. The minimum that would be paid is $4,000. What Next? As hard as it may be to walk away from the game, the NFL has made it a priority to help players into retirement. This includes the NFL Pension Plan. The NFL Pension plan provides players with specific payment amounts when they retire. It is important to discuss the benefits with your financial team. At Moment Private Wealth, we help you create a plan with this benefit in mind, including how to budget as a professional athlete. I highly suggest checking out the NFL Retirement Plan (2026 Edition). The NFL Pension is just one of the many benefits afforded NFL players. ___________________________________________________________________________________________________________ If you are in the National Football League and want to better understand the NFL Pension Plan, 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 many credited seasons are needed to be eligible for the Pension Plan? Each player must have earned 3 credited seasons to be eligible. At what age am I eligible for the NFL Pension Plan? Players can start receiving their pension at the age of 55. Do I have to start taking my pension at 55 years of age? No, a player has the option to defer payment. In doing so, the amount of the pension increases per year since a player will be receiving a pension for a shorter amount of time. Are there different Pension Plans I can choose from? Yes, there are multiple plans. Be sure to consult your financial team for the best option for you. Will my family be taken care of if something happens to me? Yes! The NFL has instituted a Widows and Surviving Children's Benefit. If the family is not included as beneficiaries in the Pension Plan, they will receive benefits via this plan. ___________________________________________________________________________________________________________ *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.

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 2026. 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 2026, you can contribute $24,500 in "pre-tax" money into your 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 2026 and contribute the max $24,500 into your 401(k) plan. Your taxable income is now $975,500 instead of $1,000,000. This means you have a potential tax savings of more than $9,000 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 $24,500 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 = $42,000 CAP Contributions *If you meet the requirements for 4 or more seasons, this amount will increase to $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." ___________________________________________________________________________________________________________ *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.

Name, Image and Likeness (NIL) has created a massive financial opportunity for college athletes. But with that comes outside pressure, added complexity and the importance of getting this "financial thing" right on the up front. As a college athlete today, you are navigating: Endorsement Deals NIL Collectives Revenue-Sharing Agreements Business Income Contract Compliance Not to mention finding an agent, the right financial advisor and making sure you build a circle of people you can trust. For you and most college athletes, this is the first time in your life you are earning significant income. And without the right guidance, that could all go away as quickly as it came in. In today's blog, I am going to outline the most important things your NIL Advisor should be doing for you and how to think about wealth management as an athlete. Advisors for NIL Athletes Understanding the True Value of NIL Income Most athletes we work with focus on the headline number of their NIL deal. That is a natural instinct. Think about it...schools are offering you life changing money at the age of 18. I would be caught up in the number too. But it is important to remember the amount that is listed in your contract is not the number you take home. News flash...it is going to be a lot smaller than you think. So then how should you be thinking about it? Well, it is first important to understand that NIL income is taxable income. But unlike a typical salary, this is reported as 1099 income. That means taxes are not automatically withheld. This is the first thing any advisor you work with should explain to you. Any good NIL advisor helps you understand: Net Income After Taxes Contract Structure Payment Schedules Long-Term Financial Implications These are table stakes for any collegiate athlete. And that starts with understanding the true value of your NIL income. Build the Right Tax Strategy Understanding how NIL income is taxed is only the first step. The next step is building a strategy to manage the taxes that come with it. The challenge is that nothing is automatically withheld from this income to cover your future tax bill. One of the biggest financial mistakes we see NIL athletes make is underestimating how much they will owe in taxes. Unlike a traditional job, NIL income is treated as self-employment income, meaning athletes may owe federal taxes, state taxes, and self-employment taxes. Uncle Sam is going to get his fair share, whether you plan for it or not. Any good financial advisor should help you with the following: Quarterly Estimated Tax Payments Deductible Business Expenses (if applicable) Coordination with your CPA This alone can save you tens of thousands of dollars in taxes. When it comes to finding the right financial advisor, these should be things they are discussing with you before money even starts hitting your account. If you are questioning whether you need a financial advisor, check out this video...I think it will change your perspective pretty quickly. And this leads to one of the most important mindset shifts NIL athletes need to make. Treat Your NIL Like a Business Believe it or not, your are your own business now. Name, Image, and Likeness income is essentially entrepreneurial income. I know that may sound strange, but it's true. Any good financial advisor will help you build the proper structure around "your business." Here's how... The first and most common step is creating a LLC. But not just any LLC. Your financial advisor should help you create a LLC...taxed as a S-Corp. The “taxed as an S-Corp” part is extremely important. Let me show you why. LLC Taxed as a S-Corp Imagine you earn $1,000,000 in NIL deals this year. If that income simply flows to you personally, the IRS treats it as self-employment income. Which means the income is subject to self-employment tax. Self-employment tax is made up of two parts: 12.4% Social Security tax 2.9% Medicare tax That’s 15.3%. However, the Social Security portion only applies up to the wage limit (around $170,000 depending on the year). So before we even talk about federal or state income tax, you would owe roughly: $55,000 in self-employment tax alone. That’s the cost of running your NIL brand without the proper structure. Now let’s look at what happens when your NIL income flows through an LLC taxed as an S-Corp. Instead of all $1,000,000 being treated the same, the income gets split into two buckets. First, you pay yourself a reasonable salary. Let’s say that salary is $250,000. Payroll taxes apply to that salary just like a normal job. But the remaining $750,000 can be paid to you as a distribution from the S-Corp. And here’s the key: Those distributions avoid self-employment tax. So instead of paying about $55,000 in self-employment tax, you might only pay around $30,000. That’s a potential tax savings of around $25,000. Again, as a collegiate athlete, navigating this correctly can be a game-changer. Your Financial Quarterback Coordinate the Right Professional Team We've established the true value of your NIL income, built a tax strategy, started treating your NIL income like a business... Now what? Your professional team is more than just your internal family now. And as a business, that starts with the right financial advisor...a financial advisor that works specifically with individuals in your shoes. But beyond that, your financial advisor should serve as your financial quarterback. That means controlling everything in your life with a dollar sign in front of it. Cash Flow Planning Tax Planning Risk Management Estate Planning Investment Management One of the biggest misconceptions athletes have is thinking their agent handles everything. Agents negotiate deals. But a good NIL advisor helps coordinate the entire financial team around you. That includes: CPAs Attorneys Insurance Specialists Agents Marketing Representatives NIL income creates legal, tax, and financial complexities that require multiple professionals working together. That all starts with a strong financial advisor acting as your financial quarterback, making sure everyone is aligned and that decisions are made with your long-term financial interests in mind. Without coordination, things can fall through the cracks. It would be in your best interest to have someone you can call that understands your entire financial picture if something were to happen. Turn Short-Term NIL Money Into Long-Term Wealth History shows most athletes will never make it to the highest level of their sport. The reality is that you may only earn NIL income for a short period of time. Only the man above knows what your future holds. But the right financial advisor plans for the worst while helping you get ahead of 99.9% of people your age. And you have the greatest superpower when it comes to building financial security: Time. Starting early is one of the most powerful advantages you have. That’s why a good financial advisor helps athletes start investing while they are still in college. And in return, it can open the door to powerful tax-advantaged accounts like: • Roth IRAs • Solo 401(k)s • SEP IRAs These accounts allow athletes to reduce taxes, grow investments tax-free or tax-deferred, and start building long-term wealth early. For example, a successful NIL athlete could potentially contribute tens of thousands of dollars per year into retirement accounts depending on their income and business structure. That kind of early investing creates a massive long-term advantage. The goal is simple. Turn short-term NIL money into lifetime financial security. If you want more specific tips on how to do this, check out The Moment Guide to NIL & Revenue Sharing. Final Thought Name, Image, and Likeness has fundamentally changed collegiate sports forever. You now have the ability to earn life changing money at the age of 18. But with that comes the responsibility of taking care of it. Hiring your financial advisor may make or break your future financial security. And their job is to help you build a financial foundation that lasts long after your college days are over. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. How does Moment Private Wealth help college athletes? Moment works to help athletes ensure they have the proper professional on their team first. The second step is helping educate athletes about what they should be considering. The third step is helping athlete implement the necessary strategies, planning, and investment to maximize their NIL earnings. How are the earnings taxed? All of the field income is taxed as 1099 or self-employment income. How does Moment Private Wealth make money? We are only paid in one transparent way, by our clients. We receive no kickbacks or participate in any profit-sharing arrangements. Our fees are simple, transparent, and clear for our clients. How are you different than other financial advisors? We are specialists in working with professional athletes and entrepreneurs. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing. How do you work with other members of my team? We believe in the power of the team. For most of our clients, their team consists of Moment Private Wealth, an accountant, an attorney, a banker, and an insurance specialist. We help our clients build out their team of individuals or work with existing partners that clients have. Our goal is to ensure every family has a team of experts to protect their interests. Why should I consider hiring Moment Private Wealth? Great question! But first, let us explain why you shouldn’t hire us. If you’re looking for an advisor who will pitch shiny object investments or be a “yes man” you are in the wrong place. Why? Because we believe in being truth tellers and only giving advice that we take ourselves. The investments, strategies, and planning we do are all things our advisors do with their own money. If you are an athlete or entrepreneur interested in things like lowering your tax bill, investing smarter, and finding a trusted partner, we might be a good fit. *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 line between amateur athletes and professional athletes is blurred. It used to be: · One is paid · One is not paid Today it is: · Both are paid · Each are paid in different ways Welcome to the ever-changing world of amateur sports, where players are (finally) compensated for the revenue they bring to their schools. Something that has taken far too long, but has provided athletes today with financial opportunities not seen by previous players. Those financial opportunities used to all be bundled into three words, NIL. NIL stands for Name, Image, and Likeness and allows athletes to profit off their star power both on and off the field. Today, it has expanded to include the term revenue sharing. Revenue sharing is the process that schools go through to allocate funds from their allocated budget of $20,500,000 towards players. Today's landscape for players includes money coming from both NIL opportunities (think of this as individual things) and revenue sharing (think of this as contracts with the school). With these increased opportunities comes increased responsibility as a player to correctly manage this money. When it comes to athlete wealth management, athletes need to make sure they have a financial team that understands all the details of their situation. In this guide, I break down everything college athletes need to know about maximizing their money moves. I will discuss how taxes work, ways players can maximize their money, and things to look out for. NIL & Revenue Sharing Guide: Contracts The compensation system for college athletes has been the Wild Wild West. Remember, this was entirely new territory just a few years ago. Today, the system has become a bit more regulated, though I would argue perhaps more confusing. Players have two distinct paths when it comes to signing compensation agreements. NIL - These are typically contracts a player signs with a business, and in return for their name, image, and likeness, they are compensated. Revenue Sharing - These are contracts signed directly with the school and based on the ~ 22%, schools can allocate towards athletic programs. To understand what it is like this let's compare these contracts (or offers) to that of a professional sports contract. In professional sports, teams and players work under a collective bargaining agreement. This agreement is one that is agreed to by both the owners (offering the contract) and the players (accepting the contract). Each league, whether it is MLB, NFL, NBA, or the NHL, has unique clauses, structures, and details to their contracts. However, what is consistent is a standard template that must be adhered to. This protects both the ownership group and the players signing the contract. While revenue sharing has elements of a standard process, NIL contracts are still all across the board. Players need to be sure that contracts are just that, contracts, and not just handshake agreements. We have seen players firsthand get burned by deals they thought they had in place, only to find out the money wasn't there. So what do you need to know as an athlete? Not all contracts are created equal It pays to have legal representation You need to understand the pros and cons of an offer Before signing anything, make sure you have protections Look, these contracts are becoming life-changing sums of money. The thing I want you to realize as a player is that this creates an additional responsibility for you to vet these deals. Now look, you don’t have to be the expert here, but you do need to be responsible for what you are signing. I encourage every athlete to run any of these offers past their agent, legal representation, and financial team. This three-pronged approach ensures that you have all of your bases covered. The old adage certainly applies here, trust but verify. This is your career; take ownership of it. Now let's talk money… NIL & Revenue Sharing Guide - Taxes It will be your largest lifetime expense, and it is your responsibility. You are going to hear me say that a lot throughout this guide ~ your responsibility. The reason is simple: I see too many athletes, both amateur and professional, fail to take ownership of their careers. This includes their money. The best outcomes come from taking ownership and combining it with a team specializing in you. Athlete wealth management requires an understanding of how less than .0001% of the population earns money ~ through sports. To understand how to maximize this income, we have to understand how it is taxed. All of this "off the field" income is taxed as 1099 income. This means it is labeled as self-employment income. In simple terms - You as the athlete, are making the money, you are your own little business, thus making it self-employment income. Think about it, you are not working for another company to earn this income, you are working for yourself. 1099 income has several key tax features to understand: It is subject to self-employment taxes It has unique retirement account options It provides more planning opportunities than traditional (W2) Income Self-Employment Taxes These are taxes imposed by the IRS to cover the costs of Medicare and Social Security. For most W2 earners, they pay one side of this, or 7.65%, while their employer covers the other side of this. For those earning 1099 income, such as NIL money, you cover both sides of this, thus doubling the amount of self-employment taxes paid. That is the bad news, now here is the good news. You can and should be planning around this to minimize this liability. One of the most common ways ($100,000 or more) is by setting up an LLC and electing S Corp tax status. This is something we help many of our college athletes at Moment execute on. The salary you pay yourself is subject to those self-employment taxes, but money above and beyond that is not. Thus saving you a potential 15.3% in self-employment taxes. If you are interested in a deeper dive into tax planning for professional athletes, check out our full guide. Retirement Accounts Ok, so it is not all bad news if you are earning 1099 income. In fact, this type of income allows you to contribute to one of my favorite retirement accounts. A Solo 401(k) Now, a Solo 401(k) is just like a company-sponsored 401(k) except it is restricted to companies that only have one employee (you) and their spouse. The vast majority of college athletes have the ability to open and utilize a Solo 401(k). Here is an example of the power of a Solo 401(k): You are earning $300,000 in NIL money. By maxing out a Solo 401(k) contribution, you reduce your projected taxable income by up to $72,000 (2026 amounts). This could save you north of $20,000 in taxes. Retirement accounts for professional athletes are like a puzzle. To complete the puzzle in the best fashion, you need to start with the core pieces. The Solo 401(k) is that core piece. Planning Opportunities In 2017, the Trump tax cuts reduced the federal tax rates but also removed many of the deductions athletes (or any W2 earner) could take. Many of those deductions still apply to those earning 1099 income. They include most expenses incurred through earning that income: Legal Fees Agent Fees Travel Costs Remember, you are your own little business, and the tax code in America favors the business owner. NIL & Revenue Sharing Guide – Investments There are a million ways to invest money, but they can all be broken down into two buckets. Ways that work Ways that don’t work In short, the ways that work are often boring, take time, and don’t provide great stories. The ways that don’t…well you can probably figure it out…they make good campfire stories. As an athlete earning off the field income, my recommendation is that you focus on investments that work. You need to treat this money just like we treat money for our professional athletes, as if it could be your last from sports. This means considering the downside of any investment just as much (probably more) than the potential upside. While this guide is not a deep dive into investments, to me, it needs to pass two tests for you to consider it. Test 1 - Does this investment have a track record of working? Test 2 - Does the potential reward equal the amount of risk I am taking? Most investments never pass those two tests, and if they don’t, just move on. Investing is about stacking the odds in your favor. Do that, and you win the game. NIL & Revenue Sharing Guide – Perfect Outcome You need to treat every dollar that you make as if it could be your last from sports. The athletes with the best financial outcomes build this mindset. The reason is simple, you have already defied all the odds to make any money from sports. To keep making money, you have to keep defying the odds. When I think about the athletes who are optimizing this off-the-field income, two words come to mind. Protection - Contracts that protect players' rights and money. Planning - They are proactively planning with a financial team that understands them. Remember, the goal is that NIL income is just the start of your journey to earning money through sports. It is a way for you to start building the habits necessary to maximize further career earnings. Yet, we also must remember it could be your last money earned through sports. The good news is the roadmap doesn’t change, whether it is the beginning or the end of your earning power. If you are a college athlete earning NIL or revenue-sharing money and have questions on how to maximize it, schedule a call with our team. At Moment, our mission has stayed the same since day one. To build the firm that I wanted as a professional athlete. One with a singular focus on helping the people we know the best, athletes and entrepreneurs. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. How does Moment Private Wealth help college athletes? Moment works to help athletes ensure they have the proper professional on their team first. The second step is helping educate athletes about what they should be considering. The third step is helping athlete implement the necessary strategies, planning, and investment to maximize their NIL earnings. What is the first step to take when receiving an NIL or revenue-sharing contract? My recommendation is to ensure you have the contract reviewed by your attorney or agent. Are all contracts the same? No, each contract is unique, and it is important for athletes to understand what they are agreeing to before signing any NIL contract. How are the earnings taxed? All of the field income is taxed as 1099 or self-employment income. What investments should I consider with off-the-field income? Before considering any investments, players should first consider what accounts further optimize potential tax savings. This is like a puzzle, with the planning coming first and the investments coming second. *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.

I remember my first big league spring training. The veteran leadership had let us know the Major League Baseball Players Association was coming in the next day for our spring meeting. A naive 18-year-old, I had no idea what that meant or what we would be talking about. That meeting opened my eyes to the sacrifices former players had made to pave the way for current players. Everyone sees the ever-increasing salaries, but what many don't see is the greatest pension allowed under US law. That's right, the MLB pension provides the highest benefits an employer can provide. In this blog, I am going to break down everything major league baseball players need to know about the MLB pension. MLBPA MLB Pension Plan The MLB pension plan dates back to 1947 and is currently the longest-running pension plan in all of professional sports. The plan is one of several benefits MLB players and coaches receive as part of the CBA (Collective Bargaining Agreement) negotiated with MLB owners. The plan has roughly 10,000 participants that can be broken down into three groups ~ active players, retired players, and players receiving benefits. One of the biggest challenges for Major League Baseball players is navigating significant early career earnings with decades as a former player. The MLB pension, which can be taken as early as age 45, helps to bridge the gap for players. Retirement planning for professional athletes requires both planning expertise and niche knowledge to understand all the options athletes have. Here is everything you need to know about the MLB pension. Qualifying for the MLB Pension To qualify for the MLB pension, we must first understand service time. MLB service time is accrued for players who are on the active 26-man roster plus players on the MLB injured list. Players on the 40-man roster but not on the active roster do not accrue service time. To qualify for the MLB pension, a player must have at least 43 days of MLB service time. 43 days of MLB service time equals one-quarter of one full year of service time. One full year of MLB service time is equal to 172 days. Once a player reaches 43 days of MLB service, they become eligible to start collecting future pension benefits. With each additional quarter of MLB service time, a player continues to accrue pension benefits. At 40 quarters or 10 years of service time, a player maxes out MLB pension benefits. MLB Pension Benefits While most pensions are going away, the MLB pension continues to rise with the cost-of-living increases. The MLBPA projects that the yearly pension will rise by ~ 1.8% yearly. Example: A player earning $100,000 in yearly pension benefits can expect to earn $101,800 next year. Players can access the MLB pension at age 45 but at a reduced rate. To receive full pension benefits, a player must delay taking it until age 62. In 2026, the current pension benefits (at age 62) are as follows: 43 days of MLB service time = $7,250 pear 1 year of MLB service = $29,000 per year 5 years of MLB service = $145,000 per year 10 years of MLB service = $290,000 per year At Moment Private Wealth, we provide MLB players with calculations on when it would be most optimal for them to take their pension benefits. MLB Pension Considerations One of the biggest challenges professional athletes face is the length of "retirement". With that average professional athlete retiring before 30 years old, this leaves decades to live off of your career earnings. The MLB pension can help players fill the retirement gap. Understanding pension and league benefits is a critical piece of mapping retirement for professional baseball players. As you begin planning for what a future pension looks like, you need to understand two main factors: Cost of living adjustment - The MLB pension has a COLA increase each year that currently stands at 1.8% per year. This means that your monthly pension amount will increase each year at a rate of 1.8%. Early access adjustments - The MLB pension allows players access as early as age 45, but not without consequences. A full pension, 10 years of MLB service at age 62, is worth $290,000 per year. That same pension accessed at age 45 is worth less than half of that. Whether you accrue 43 days of MLB service time or more than a decade, the MLB pension should be a part of your retirement planning as a Major League Baseball player. You need to understand all the factors and how they affect your overall plan. - While MLB players have countless public benefits, players need to understand the private benefits. Time and time again, we see athletes unaware of the benefits they have, including the MLB pension. I can't stress this enough, but you don't want to be working with a financial team learning on your situation. You want to be working with a specialist in athlete wealth management. Done correctly, these benefits can provide youwith millions of dollars in lifetime benefits. If you are a Major League Baseball player looking to better understand the MLB pension, schedule a call and talk 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 much is the MLB pension? Players receive pension benefits starting at 43 days of MLB service and maxing out at 10 years of MLB service time. In 2026, the MLB pension maxes out at $290,000 per year. When can players access MLB pension benefits? Players can start accessing MLB pension benefits as early as age 45 with full pension payouts happening at age 62. How does Moment Private Wealth help professional baseball players? We are specialists in working with professional athletes. We help professional baseball players with income planning, tax planning, risk management, estate planning, and investment management. We also help MLB players navigate the MLBPA benefits plan package including the MLB pension. Does Moment Private Wealth help professional baseball with retirement planning? Yes, outside of navigating MLB pension benefits, Moment Private Wealth helps professional baseball players with tax planning, retirement planning, and optimizing their entire financial life both during and after their playing career. Where can I find out more information about my specific pension benefits? Major League Baseball players can contact the MLBPA for more detailed answers to the MLBPA benefits plan package. *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.

Done correctly, players can get more than $16,500,000 in retirement plan benefits, countless tax savings, and access to lifelong health care. Retirement planning for professional athletes is a mix of understanding specific information and how it connects to your life. I had seen the big contract numbers. I had heard of the opportunities Major League Baseball players had. Yet, one thing I didn’t understand was the MLB benefits plan. What benefits do players get? How are those benefits calculated? How do players access those benefits? What things should players be aware of? I remember hearing my agent talk about all the benefits I was getting by being put on the 40-man roster but I didn’t get it. In this article, I am going to break down everything Major League Baseball players need to know about the MLB retirement plan in 2026. MLBPA MLB Retirement Plan To unlock the full benefits of the MLB retirement plan, you must do two things: · Be on an MLB 40-man roster · Be on an MLB active roster (26 players) Think about this like levels of a game. The first level (40-man roster) unlocks certain benefits. The second level (MLB active roster) unlocks additional benefits. The longer you play at those levels the greater the benefits. The 40-Man Roster Benefits The 40-man roster is the roster of players eligible to be added to the active roster. This is a collection of the team's starters, role players, fill-in pieces, and top prospects. Players who achieve 40-man roster status are eligible for certain employee benefits through the Major League Baseball Players Association. The biggest benefit is the MLB players' “Active” health care plan. This is arguably one of the greatest healthcare plans in the world. It is a privately run plan administered through Aetna. The plan calls for minimal out-of-pocket costs to players. The premiums (cost of the policy) while active on a 40-man roster are covered by the teams. One important note for players to understand is that once they are added to the 40-man roster, it is critical to add all family members. While active players are automatically added upon their addition to the 40-man roster, their families are not. It is the player's responsibility to ensure their family is added. As financial advisors for professional athletes, we ensure all players' families are correctly added to the proper forms. Active Roster Benefits The active roster consists of 26 players as of 2026. These are players that are eligible to play in regular-season games. To be on the active roster, you must first be added to the 40-man roster. While healthcare benefits are great, the real benefits kick in for players on the active roster. To understand how players access these benefits, we have to understand MLB service time, how it is calculated, and how it affects players' benefits. MLB Service Time MLB service time is the time a player receives for each day they are on the active roster. While an MLB season is 162 games, service time is calculated based on the number of duty days in a given year. To acquire a “full season” of MLB service time, a player must achieve 172 days on the active roster. For context, the typical MLB season has between 180 and 190 duty days. Why does this matter? The three biggest benefits active players receive are: · 401(k) Benefits · MLB Pension Benefits · Healthcare Benefits Post Playing (more on that later) Each one of these benefits starts to kick in based on service time. Here are the key service time figures and benefits received: 1 Day: One day of MLB service time provides players eligibility to contribute that day’s paycheck to the MLB 401(k) Plan. This plan is administered through Vanguard. *Minor League Players are also eligible for 401(k) contributions but there is no team contribution. 43 Days: 43 days of MLB service time is equal to one-quarter of a season. This milestone for a player gives them team contributions to the 401(k) and MLB pension benefits. 172 Days:172 days of MLB service time gives a player 1 full year of service time. This milestone gets a player closer to arbitration (approximately 3 years of MLB service time) and MLB free agency (6 years of MLB service time). 4 Years: 4 years of MLB service time provide players with access to the health care plan after playing. While it switches and players have to pay the premiums, this is an incredible benefit for retired players with four years or more of service time. 10 Years:10 years of MLB service time provides players with a full pension. This is the holy grail for any MLB player. The full pension is currently $290,000. - Now that we understand MLB service time and how it effects player’s benefits, let’s dive into the details of each benefit a player can receive. Remember the three biggest benefits active MLB players receive are: The three biggest benefits active players receive are: · 401(k) Benefits · MLB Pension Benefits · Healthcare Benefits Post Playing 401(k) Benefits In 2026, a player can contribute $24,500 in “pre-tax” money to his 401(k) plan. This means you receive a tax deduction for his contribution. Example: A player making $1,000,000 contributes $24,500 to the plan and has a taxable income of $975,500 instead of the full $1,000,000. A potential tax savings of more than $8,500, assuming the 37% federal tax bracket. Unlike most company 401(k) plans, the MLB 401(k) plan provides no match. Instead, teams provide direct contributions to players' 401(k) plans. The exact number is calculated based on the luxury tax teams’ pay. *The luxury tax is a calculation based on a team going over certain spending thresholds. So remember, when you see teams like the Mets and Dodgers paying a large luxury tax a portion of that money is coming back to players in the form of team 401(k) contributions. In 2025, teams contributed $17,500 per quarter (43 days) of MLB service time a player had. So, for a player with a full year of MLB service time, they maxed out their 401(k) at $70,000 without having to contribute one dollar of their own money. Players must understand this changes on a yearly basis based on the amount of money teams pay in luxury tax. MLB 401(k) Plan MLB Pension Benefits While most pensions are going away, the MLB pension remains. In fact, it is one of the best in the world. Each year, the pension benefits increase to the highest allowable by law. In 2026, the current pension benefits are as follows: 43 days of MLB service time = $7,250 pear 1 year of MLB service = $29,000 per year 10 years of MLB service = $290,000 per year Players receive these benefits with each quarter (43 days) of MLB service time they acquire. To achieve full pension benefits, players need to wait until age 62. Players do have early access to pension benefits at the age of 45. MLB players need experts in athlete wealth management to provide calculations on when it would be most optimal for them to take their pension benefits. Health Care Benefits While every player added to the 40-man roster is automatically added to the MLB health care plan, certain service time thresholds provide additional benefits. Players who acquire four years of MLB service time are eligible to stay on the health care plan in retirement. Players who choose to stay on the plan are required to cover the premium (cost of the policy) payments. A few key notes on the policy: · Enrollment/Changes to the policy are due by opening day. · There are three policy options (active, base, and buy down). · Each policy option provides varying benefits and premium amounts. · If a player elects to move off the plan, he cannot get back on the plan. Players must understand this benefit and how it works. As financial advisors for athletes, we run yearly analyses on the three options for players to ensure our athletes are choosing the correct plan. To understand just how powerful this benefit is for players, let's compare two plans. The first is an open marketplace (Public plan), and the second is the “Buy Down” MLB plan. I use this example because I utilize the “buy down” plan for my family of six. - While MLB players have countless public benefits, it is critical MLB players understand the private benefits. Time and time again, we see athletes unaware of the benefits they have. Athletes must work with a qualified financial team that specializes in working with Major League Baseball players. Remember, done correctly, these benefits can provide millions of dollars in lifetime benefits. In fact, for a player entering the Major Leagues in 2026 and playing for 10 years, these benefits can easily exceed $16,500,000 in lifetime value. - If you are a Major League Baseball player who is looking to better understand the MLBPA benefits, schedule a call, and talk 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 many days does a player need to qualify for benefits? The majority of benefits, including the MLB pension, start with 43 days of service time on the active roster. How does a player qualify for the MLB health care benefits? Players need to have at least four years of MLB service time in order to stay on the MLB health care plan after retirement. Do players have to pay for health care benefits in retirement? Yes, players have to pay for health care premiums after their playing career ends. How much is the MLB pension in 2026? Full pension in 2026 is $290,000 per year for players who accumulate 10 or more years of MLB service time. A player is credited $29,000 per year in pension benefits for one year of MLB service time. At what age can players take the MLB pension? MLB players can take the MLB pension as early as age 45 but to get full pension benefits a player must wait until age 62. Can players roll over the MLB 401(k) in retirement? Retired MLB players can roll over their Vanguard MLB 401(k) plan into an IRA. *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.

Let me take you back to my signing day. I was 18 years old. No credit card. No clue how taxes worked. No idea what a “qualified account” was. And suddenly, I was a millionaire. We went out to celebrate with my family at a local ice cream shop. I remember sitting there thinking, "Is this real?" The next morning, I woke up and life went on, but with one major difference. The financial decisions I made from that point on would either set me up or set me back. For a lot of athletes, that moment becomes the start of a slow build toward a lifestyle they can’t sustain. They go from nothing to everything, and they build it fast. This blog is about why that happens, the mistakes I see athletes make (because I made them too), and how to build your lifestyle intentionally, not reactively. If you haven't already, check out our guide to athlete wealth management as a primer for this blog. Let’s dive in... The Athlete Dilemma Let’s be honest, most athletes didn’t grow up around wealth. So when you go from a per diem in the minors to direct deposits with commas, the instinct is to reward yourself. The new car (because yours barely made it through college). The custom suit (because you're finally walking into rooms that demand it). The watch, the place, the vacation, the entourage ( all of it feels earned). And in many ways, it is. But here’s the problem... Most athletes build permanent lifestyle habits off temporary income. We buy big. We commit big. We assume the money will keep coming. Until it doesn’t. And by the time we realize we’ve overbuilt… It’s hard to unwind. Real Cost of "Leveling Up" You’ve probably heard this before: “If you can buy it twice, you can afford it.” Sounds easy, but consider the money spigot can turn off at any moment. Let me show you what I mean by “hidden costs”... Example: The $2M House $2,000,000 purchase price $40,000/year in property taxes $12,000/year in insurance $25,000/year in maintenance $15,000/year in furnishings/updates That’s $90,000/year to keep the house running… and we’re not even talking about the mortgage if you didn’t pay cash. Now add in: A luxury car with a $1,500/mo payment Private school tuition for your kids Family travel costs Business class flights (because coach now feels “impossible”) You’ve gone from millionaire to monthly stress in 12 months or less, all because you built your lifestyle too fast. The Psychology of Being "New Rich" It’s not just about money. It’s about what money represents. For many of us: It’s a way to feel like we made it. It’s a way to take care of the people who sacrificed for us. It’s a way to prove something ~ to family, to our past, to the world. But here’s what I wish someone had told me early on... You don’t have to prove anything with your purchases. The lifestyle you build early on becomes the floor you feel like you have to maintain later. Most athletes build that floor way too high and then struggle to sustain it when the checks slow down or stop altogether. Here are a few frameworks to consider: 1) Know Your Baseball Lifestyle Ask yourself this simple question: “If the money stopped tomorrow, what would it cost to maintain my lifestyle?” That’s your baseline lifestyle cost. Track it. Own it. Review it monthly. This includes: Mortgage or rent Car payments Insurance Food and travel Family support Taxes (don't forget the taxes) Once you know this number, you’ll know what your lifestyle actually costs, not just what you’re swiping on the card. 2) Separate Rewards from Commitments Not all spending is bad. But it needs to be categorized. I break it down like this: Reward Purchases One-time items to celebrate a win. They don’t create monthly stress. Examples: A Rolex. A trip to Paris. A new suit. Lifestyle Commitments Ongoing expenses that require future income. Examples: Mortgage. Luxury lease. Private school. Staff. A reward purchase is a pat on the back. A commitment is a financial anchor. 3) Build a Lifestyle for Each Season You don’t need to buy the mansion in Year 1. Instead, think in seasons: Rookie Contract = Build financial margin Second Deal = Layer in a few key lifestyle upgrades Major Extension or Exit = Add long-term assets & experiences The more time you give yourself, the more options you have. The more options you have, the more freedom you feel. The beautiful part about all of this is, it is in your control. You have the opportunity to build and direct your outcome. Yet to do that, it takes real work, real planning, and real focus. As athletes, we have one chance to do this right. My goal is to help every athlete get smarter with their money moves. If you want more ways to do that, check out my YouTube page. If you are ready to get to work, schedule a call with our team. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions receive regarding athletes and money: What is the #1 spending mistake athletes make? It is thinking they can build a lifestyle on earned income (contracts) and not saved income (investments). What should my savings percentage as an athlete be? For most athletes, we are targeting between 60%-80% once they are making significant money. What about big one-time purchases? We encourage reward purchases, but we have to remember that these are, in fact one one-time purchases. Do you recommend that athletes buy a house? In most cases, no, and this is because the cost can often be far more than first thought. You add in the fact that most athletes are not in the same city year after year. *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.

(How to keep more, protect more, and build what lasts.) If you're an athlete, your career will move faster than most people’s lifetime. Your earning years start earlier. Your peak is shorter. And your transition out of the game? It usually happens while your peers are just starting to hit their stride. That’s why your approach to wealth has to be different. It has to be smarter, more disciplined, and designed around your real timeline — not the one most people follow. At Moment Private Wealth, we often break down an athlete’s financial life into three distinct phases: Foundation: When the money starts coming in. Peak: When you’re earning big and playing at the highest level. Impact: When the game changes — and you start thinking bigger than yourself. Each phase requires a different mindset and a different plan. Here's how to think through each one — and how to avoid the common traps that can derail even the most talented pros. Phase 1: Foundation (Where most mistakes happen.) This phase starts when the income begins to show up — NIL deals, rookie contracts, first bonuses. For many athletes, it’s the first time real money is hitting the account. And that’s where the danger starts. What you should focus on: Building your financial base — not your lifestyle. Protecting yourself from the unexpected: injury, lawsuits, bad deals. Learning the basics: taxes, budgeting, and knowing what “after-tax” really means. Assembling your team: financial advisor, CPA, attorney, and someone you trust who’s not afraid to tell you no. What to avoid: Spending like it’s forever. (Spoiler: It’s not.) Assuming a deal is done before the check clears. Letting friends, agents, or brands pressure you into financial decisions. Waiting too long to build habits — lifestyle creep is real and hard to reverse. At this stage, the biggest wins come from what you don’t do. Don’t overextend. Don’t assume. Don’t wing it. If you can stay disciplined in Phase 1, you’ll give yourself room to grow in Phase 2. Phase 2: Peak This is when you’re at your earning high point. Contracts are bigger. Deals are more complex. Everyone wants to be in your inner circle. This phase can be incredibly rewarding — and incredibly risky. Because the faster the money comes in, the easier it is to lose track of where it’s going. What you should focus on: Sustainable growth — not just fast returns. Strategic diversification: real estate, equity, business interests, passive income. Advanced tax planning: strategy, structure, and types of income. Structuring your lifestyle around cash flow, not net worth. This is also the time to start preparing for the next phase — even if it feels far away. What to avoid: Making emotional investment decisions. (Friends don’t always make good business partners.) Buying liabilities that look like assets. Forgetting that endorsements, sponsorships, and playing time aren’t guaranteed forever. Ignoring estate planning — especially if you have kids or are supporting family. Your goal in Phase 2 isn’t just to grow your money. It’s to build options. And the best time to do that? When things are going well. Phase 3: Impact (Where the real wealth is built). This is where the game changes. Maybe you’ve retired. Maybe you’ve stepped away from pro sports or pivoted into something new. Regardless of how you got here, the priorities shift. In this phase, the income slows down — but the opportunities open up. What you should focus on: Replacing active income with income-producing assets or business ventures. Protecting your downside: lower risk, lower fees, lower drama. Maintaining a smart lifestyle that your post-career income can support. Defining your legacy: not just financially, but through what you build and give. This phase is also where identity becomes a huge factor. We’ve seen it time and time again — the mental transition can be just as challenging as the financial one. What to avoid: Hanging on to old spending patterns with new income levels. Selling assets under pressure. Trying to “prove you’re still winning” with risky ventures. Losing track of the long game. Wealth isn’t what you make. It’s what you keep — what you build and the impact you have. The athletes who win in this phase are the ones who prepared before they had to. Why This Matters More Than You Think Athletes operate on a compressed financial timeline. You start earlier, earn more, and exit faster than just about any other profession. Which means there’s less room for error. One bad investment. One contract dispute. One year of unchecked spending — and you’re starting over. But when you treat your wealth journey like a career — with training, strategy, and accountability — the odds shift in your favor. Big time. These 3 phases are just the beginning of your financial journey. Wealth Management for Professional Athletes doesn't happen overnight. But if done right on the upfront, you will be better off than 99.9% of your teammates. ___________________________________________________________________________________________________________ If you are an athlete and want to better understand how to manage your wealth, 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 do I know if I have the right team in place? It starts with asking the right questions. "How will you help me reach my goals? Who else have you worked with? How have you helped athletes just like me?" They need to be able these questions with direct answers. How do I know which phase I am in? Start by asking: Where is your income coming from, and how stable is it? Are you still building your foundation, maximizing peak earnings, or transitioning into a new chapter? The phase you're in shapes the financial decisions you should be making right now. What’s the most important move I can make in my current phase? It depends on where you are. In Foundation, it's about protection and habits. In Peak, it’s about planning for life after the game. In Impact, it’s about sustainability. Each phase has its own set of priorities — knowing yours is the first step. Can I skip a phase if I am already earning big money? No — and skipping the Foundation phase is one of the biggest mistakes we see. Even if you're making great money, you still need the basics in place: cash flow plan, protection, and a smart team around you. What is the first step I should take? Set up a call with a financial advisor at Moment Private Wealth who specializes wealth management for professional athletes. ___________________________________________________________________________________________________________ *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 biggest financial mistakes most MLB Draft picks make have nothing to do with baseball. They don’t come from strikeouts, slumps, or stat lines. They come from what happens off the field — and when they make their first financial decisions. And almost all of it comes down to one choice: They wait to hire their financial team. MLB Draft Window For most players, Draft Day feels like the finish line. But financially, it’s the starting block. Those first 30 days are when the most important decisions get made: Where you establish residency. How your signing bonus is structured. When you fund retirement accounts. Who you trust to guide you through it all. Get those moves right, and you build a foundation for decades of growth. Get them wrong, and you can fall behind before you make your professional debut. Want a full breakdown of how the MLB Draft works? Read The Moment Guide to the MLB Draft. Here’s a real example of how timing can change everything. The difference shows up fast — and it starts with when you build your team. Pre-Draft vs Post-Draft: The Real Difference Before we dive into the numbers, let’s bring this to life. Every year, we see talented players step into the draft with similar tools, similar upside, and similar financial opportunities — but end up on completely different paths based on how early they build their team. The contrast is striking, and it comes down to one thing: timing. These two players entered the same draft, were both top 50 prospects, but made their decisions on very different timelines. One brought us in early — well before their first dollar ever hit the account. The other waited until after the draft, when the opportunities for proactive planning were far more limited and felt rushed. This one difference in timing created two very different financial futures. 🟢 Player A: Hired Early and Planned Ahead What We Planned for Ahead of Time: Established residency in a no-tax state before signing Coordinated contract structure with their agent and financial team Contributed to a Solo 401(k) and MiLB 401(k) early Ran full tax projections before their first tax season Set up banking, payroll, and legal protections from Day One Impact of Early Planning ~ $130,000+ in total savings ~$100,000+ from state tax savings ~$25,900 from Solo 401(k) tax benefits ~$8,700 from MiLB 401(k) contribution Result: Player A started their career with structure, clarity, and momentum. They had their tax strategy, cash flow plan, and savings vehicles in place before they even stepped foot on the field — which meant they could focus entirely on baseball. 🔴 Player B: Hired Late and Played Catch-Up What Couldn’t Be Planned and Implemented in Time: Missed residency window → taxed as a resident of a high-tax state Missed opportunities to optimize payment timing and terms No retirement contributions in Year One Tax planning was reactive instead of proactive Managing avoidable issues instead of enjoying a huge payday Cost of Waiting ~ $180,000+ in lost opportunities Extra state taxes paid Missed Solo and MiLB 401(k) tax savings Result: Player B followed a comparable path with comparable upside — but was already playing financial catch-up. Instead of building wealth, they were scrambling to fix costly mistakes from day one. Their careers started the same, but their planning didn’t — and the results show it. When MLB Draftees Should Hire a Financial Team That gap wasn’t about talent — it was about timing. Draft picks assume they’ll have time to figure it all out later. But many of the biggest financial levers can only be pulled before your bonus hits or within the first few weeks of signing. If you miss them, they’re gone — and they don’t come back. Something to consider is also knowing the details around your signing bonus. Lucky for you, we have you covered: MLB Signing Bonus Explained: A 1st Rounder's Story Here’s why early planning changes everything: Residency Planning Where you live when you sign your contract determines which state claims income tax on your signing bonus. For high-tax states, that can mean 10%+ of your bonus is gone before you touch it. If you wait until after signing to move, you’ve already missed the window. Contract Structure Coordination MLB teams can structure signing bonuses across different tax years. That affects which tax bracket you land in and how much you owe. Without planning, players often receive their bonus in a way that maximizes their taxes instead of minimizing them. Retirement Contributions Solo 401(k)s and the MiLB 401(k) are powerful tools to reduce taxable income and start compounding early. Waiting means you lose an entire year of contributions, growth, and tax savings — and the IRS doesn’t let you retroactively go back. Legal & Insurance Protections Disability insurance, liability coverage, wills, and POAs protect your career and your family. They’re easiest and cheapest to get before there’s a problem. Once something happens, it’s usually too late. Players who hire early don’t just save money — they gain clarity, control, and peace of mind. They step into their pro careers prepared, not panicked. The First 90 Days Most draft picks think of their signing bonus as a reward. The best ones treat it as seed capital. It’s the only time in your life where you can convert a single check into lifelong financial security — if you plan for it. Instead of asking: “What can I afford now?” Ask: “How do I turn this into long-term wealth?” That’s what separates the players who are broke five years after retiring from the ones who never have to work again. Here’s what an early team will actually do before your first game: Residency planning and documentation — to establish tax domicile and maximize state tax savings. Tax projections and withholding setup — to avoid surprises and plan cash flow around what you’ll owe. Retirement account contributions — Solo 401(k) and MiLB 401(k) to reduce taxable income and jumpstart compounding. Contract structure review — to align bonus payouts and salary timing with your tax strategy. Legal and insurance protections — disability, liability, and estate documents — should be in place before they’re ever needed. Budget and cash flow strategy — to manage living costs, training expenses, and savings goals with clarity. This structure gives you clarity, confidence, and control — instead of scrambling because you didn’t plan ahead. The Cost of Waiting Waiting isn’t neutral — it’s expensive Surprise tax bills — from missed projections and poor withholding. Lost state tax savings — by missing the residency window. Missed retirement contributions — delaying compounding and long-term growth. Unfavorable contract terms — from uncoordinated bonus and salary structures. Financial stress and distractions — instead of clarity and focus on the field. By the time most players finally call for help, they’ve already lost opportunities they can’t get back. Key Takeaways Hiring a financial team early isn’t overhead — it’s leverage. It protects what you earn and multiplies what you keep. The most expensive mistakes happen in the first 30 days. Once they’re made, they’re hard or impossible to undo. Waiting doesn’t save you time — it costs you money. The earlier you build the foundation, the further you get ahead. The Bottom Line If you’ve just been drafted — or expect to be soon — now is the moment to build your financial team. Don’t wait for check-cashing or tax season surprises. Let’s run your numbers, map your strategy, and help you keep more of what you earn. Schedule a call with Moment Private Wealth today. We specialize in turning draft victories into lifetime financial wins. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions received regarding athletes and money: When does Moment start working with future MLB draftees? We start working with families often a year before the MLB draft. Our goal is to ensure every family is educated on their options and can enjoy the draft when it comes. Does Moment help players with state residency? Yes, Moment has a checklist we walk every player through to ensure they are compliant in navigating state residency. How does Moment work with my agent? Moment works with every major sports agency, and that collaboration ensures all of our athletes maximize not just their signing bonus but their career earnings. Does Moment provide tax planning and strategy for MLB draftees? Yes, we handle all of our athletes' tax planning and team coordination. As part of your team at Moment, you will be working with a sport-specific CPA firm specializing in navigating everything that comes with athlete taxation. *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.

Have you seen the social media post about buying a G Wagon and writing it off for taxes. Well this is one of the most famous tax deductions business owners can take advantage of. We are going to dive into this strategy and more in this blog. Tax deductions are one of the most powerful tools business owners have to legally reduce taxable income. Whether you’re just starting out or running a 7-figure operation, knowing what you can write off and how to do it right can save you tens (or hundreds) of thousands of dollars a year. Want to go beyond tax deductions? Check out our Moment guide to tax planning for business owners here. Tax Deductions for Business Owners In this guide, you'll learn: What counts as a tax deduction in 2025 Which expenses business owners can (and can’t) write off A real-world, 7-figure example with detailed tax savings The answer to the question we are frequently asked by business owners like you. What Is a Tax Deduction? A tax deduction reduces your taxable income, which lowers the amount of income that gets taxed. Example: If your business earns $1,000,000 in gross revenue and you deduct $400,000 in expenses, you're only taxed on $600,000. To be deductible, the expense must be: Ordinary — common in your industry Necessary — useful for your business operations What Business Expenses Are Deductible in 2025? Can I deduct my home office? Yes, if it’s used exclusively and regularly for business. You can deduct a percentage of: Rent or mortgage interest Utilities Internet Repairs Can I deduct business meals? Yes. In 2025, you can deduct 50% of meals that are business-related, including: Client lunches Travel meals Staff celebrations Can I deduct business travel? Yes. You can write off: Flights Hotels Rental cars/Ubers 50% of meals while traveling Can I deduct my car expenses? Yes. You can choose between: Standard mileage rate (TBD for 2025, but was $0.67 in 2024) Actual vehicle expenses (gas, insurance, depreciation) Can I deduct software and tools? Yes. Tools like CRMs, accounting software, design platforms, and project management apps are all deductible if used for business. Can I deduct advertising and marketing? Absolutely. Common deductible marketing costs: Paid social ads SEO services Influencer marketing Branded content Sponsorships Are wages and benefits deductible? Yes. Employee salaries, payroll taxes, health insurance premiums, and retirement plan contributions are all tax-deductible business expenses. Are contractor payments deductible? Yes. Payments to freelancers, consultants, or 1099 contractors are fully deductible if for business services. Can I deduct education and training? Yes, if it improves your skills or helps maintain your business. Examples: Certifications Business courses Industry conferences Can I deduct startup costs? Yes. You can deduct: Up to $5,000 in the first year The rest amortized over 15 years Are bank fees and interest deductible? Yes. This includes: Credit card processing fees Business loan interest Bank service charges Real-World Example: Tax Strategy for a $1.3M Business in 2025 Business Profile: Boutique Marketing Agency Owner: Danielle Business Structure: S-Corp Location: Austin, TX Gross Revenue (2025): $1,300,000 W-2 Salary (Danielle): $160,000 Team: 5 full-time employees + contractors Deductible Expenses Category Amount Salaries & Wages $420,000 Payroll Taxes $35,000 Health Benefits $28,000 Contractor Payments $96,000 Office Rent $48,000 Software & Tools $12,000 Marketing & Lead Gen $39,000 Business Travel $21,000 Legal + Accounting $16,500 Equipment (Sec. 179) $23,000 Utilities + Internet $6,000 Insurance (General + Cyber) $7,800 Education & Training $5,400 Business Meals (50%) $3,750 Home Office (Accountable Plan) $3,600 Total Deductible Expenses: $771,050 Retirement Strategy: Maxing Out the Solo 401(k) Danielle contributes the maximum allowed in 2025: Contribution Type Amount Employee deferral $23,500 Employer contribution $46,500 Total Contribution $70,000 Additional Tax Strategies Used Strategy Amount Deducted / Saved Section 179 Equipment $23,000 Solo 401(k) $70,000 Accountable Plan $3,600 R&D Tax Credit $14,000 (credit, not deduction) Taxable Income Calculation (After Deductions) Gross Revenue: $1,300,000 Business Deductions: $771,050 401(k) Deduction: $70,000 Accountable Plan (home office): $3,600 Taxable Income: $455,350 R&D Credit: –$14,000 (direct tax reduction) Federal Tax Comparison: With vs. Without Deductions Scenario Taxable Income Est. Tax (32%) Less R&D Credit Final Tax Owed No Deductions $1,300,000 $416,000 — $416,000 With Deductions $455,350 $145,712 –$14,000 $131,712 Total Tax Savings: $284,288 Real-World Example 2: Solo E-Commerce Seller (LLC) Business owner: Mariah Business type: Single-member LLC (Schedule C) Gross revenue: $220,000 (Shopify + Etsy sales) Products: Handmade skincare No employees Deductible Expenses Category Amount Cost of goods sold $65,000 Packaging + shipping $11,000 Software + e-commerce tools $4,500 Marketing (Facebook, IG ads) $18,000 Product photography + branding $2,000 Home office (15% of rent/util) $3,000 Phone + internet (80% bus use) $1,600 Equipment (label printer, desk) $2,500 Education (YouTube ads course) $1,200 Health insurance (self-employed) $4,200 Business travel (2 trade shows) $3,600 Total deductions: $116,600 Solo 401(k) Contribution Mariah netted about $100,000 after deductions. She contributed: $23,500 employee deferral $18,000 employer contribution (approx.) Total retirement deduction: $41,500 Tax Summary Revenue: $220,000 Total deductions: $116,600 + $41,500 = $158,100 Taxable income: $61,900 Estimated federal tax (22%): $13,618 What Can’t You Deduct? Some common expenses are not deductible, including: Personal expenses (unless allocated properly) Clothing (unless uniforms or protective gear) Fines and penalties Political contributions Social or athletic club dues Frequently Asked Questions Can I deduct business expenses if I don’t have an LLC? Yes. Sole proprietors and freelancers can deduct business expenses on Schedule C of their personal tax return. You don’t need an LLC. What records should I keep to support deductions? Keep: Receipts Invoices Mileage logs Bank/credit card statements Notes describing the business purpose Maintain documentation for at least 3 years. Can I deduct business expenses paid from my personal account? Yes. As long as the expense was 100% business-related, it’s deductible.But it’s better to use a dedicated business account or card for clean record-keeping. How do I deduct partial-use items (like a phone or car)?Deduct only the business-use percentage. Example: If you use your car 70% for business and total expenses are $10,000, you can deduct $7,000. Is my own pay deductible? Sole Proprietor or Single-Member LLC: No. Owner draws are not deductible. S-Corp/C-Corp: Yes. Wages you pay yourself through payroll are deductible. What if I get audited? As long as your records are organized and the deductions are legitimate, you're fine.Most audits are triggered by: Excessive deductions Inconsistent income reporting Poor recordkeeping Can I amend a previous tax return to claim missed deductions? Yes. Use Form 1040-X to amend a federal return.You have up to 3 years from the original filing date. Can I deduct losses from a business that didn’t make a profit? Yes. If you show a true profit motive, the IRS allows deductions—even with losses. But if you report a loss 3 out of 5 years, the IRS may treat it as a hobby. What tax deductions do most business owners miss? Home office Section 179 equipment Health insurance (self-employed) Augusta Rule (rent your home) Solo 401(k) employer contributions Mileage for local business errands Can I deduct clothing or personal grooming? No—unless it’s a uniform or protective equipment required for the job.Regular clothes, even if worn for work, are not deductible. Are gifts to clients deductible? Yes, but limited to $25 per person per year. Branded swag may qualify separately under marketing. What if I run multiple businesses? You must keep separate records and only deduct expenses specific to each business.Some shared costs (like your phone) can be allocated proportionally. Can I pay my kids and deduct it? Yes—if they perform real work, you can pay them a reasonable wage: Under 18: No payroll taxes (if sole prop or partnership) Deductible as a business expense Great way to fund their Roth IRA or 529 plan. Business Tax Deductions Checklist (2025) Fixed Expenses Office rent Utilities, internet, phone Software subscriptions Insurance (liability, auto, cyber) Variable/Strategic Expenses Marketing & advertising Business travel Equipment purchases Education & training Labor Costs W-2 employee wages Payroll taxes Contractor (1099) payments Owner retirement contributions Home-Based Business Home office Rent under the Augusta Rule Partial utilities/internet Furniture/equipment Financial/Admin Legal & accounting fees Bank fees Credit card processing Business loan interest Final Thoughts: Deductions Are Growth Tools Tax deductions aren’t just about lowering your bill. They’re about: Keeping more capital in your business Reinvesting in growth Funding things like retirement and hiring Lowers your tax bill Increases reinvestable profit Supports long-term planning (hiring, scaling, saving) The better your tax strategy, the faster your business scales—legally and profitably. And if your tax pro isn’t walking you through all of these opportunities?It might be time for an upgrade. Bonus Tip: Work With a Proactive Tax Advisor Most business owners work with a tax preparer who files returns after the year ends. That’s reactive. What you need is a proactive tax strategist—someone who: Reviews your financials quarterly Suggests entity changes when appropriate (e.g., switching to S-Corp) Helps you plan retirement contributions strategically Guides you on recordkeeping that protects you in audits This is where Moment Private Wealth steps in. Ready to talk tax planning? Get in Touch With An Advisor Frequently Asked Questions: Tax Deductions for Business Owners Here are some answers to questions I received frequently about this topic. How does the "G-Wagon tax write-off" or Section 179 deduction work for business vehicles? To claim a full or partial Section 179 deduction for a heavy SUV or truck (vehicles with a Gross Vehicle Weight Rating over 6,000 pounds), the vehicle must be purchased and placed into service during the tax year and used more than 50% for business operations. The deduction is limited based on your exact business-use percentage and capped at specific inflation-adjusted IRS limits for the year. Can I use the Augusta Rule to rent my home to my business tax-free? Yes. Under Section 280A(g), you can rent your primary residence to your business for up to 14 days per year for corporate events, board meetings, or client entertaining. The business claims a write-off for the rental expense, while you receive the rental income on the personal side completely free from federal income tax—provided the rate reflects local market comparables and is backed by thorough corporate minutes. What is the difference between a business tax deduction and a tax credit? A tax deduction reduces your total taxable income, meaning your net cash savings depend entirely on your marginal tax bracket. A tax credit reduces your actual tax bill dollar-for-dollar. For example, if you are in the 32% tax bracket, a $10,000 deduction saves you $3,200 in cash, whereas a $10,000 R&D tax credit slashes a full $10,000 directly off what you owe the IRS. How do I legally pay my kids through the business to lower my taxable income? You can hire your children to perform legitimate, age-appropriate work for your company, such as managing social media, modeling for marketing materials, or handling basic data entry. The wages paid must be reasonable for the job performed and are fully tax-deductible to the business. If your business is an LLC or sole proprietorship, wages paid to children under 18 are exempt from FICA taxes, and the earnings can be used to fund a Roth IRA to build early generational wealth. What triggers an IRS audit for high-earning business owners taking heavy deductions? The IRS relies on automated system flags that track anomalies. For business owners, the most frequent audit triggers include taking disproportionately high deductions relative to your gross business revenue, writing off 100% of a personal vehicle without a secondary commuter car, claiming a home office deduction that violates the "exclusive use" rule, or reporting recurring net losses on a business across multiple years. Keeping clean, digitized documentation for a minimum of three years is your best line of defense.

“Wait, you mean to tell me I owe more in taxes?” This was me circa 2009 when it came time to file my tax return. You see, I had just signed my first MLB contract, paid what I thought was a king’s ransom in taxes, and here I was still owing more. Fast forward a few decades, and I have the opportunity to lead Moment Private Wealth. A financial planning firm that specializes in athlete wealth management. They say history repeats itself, and that certainly feels true as we advise our athletes. They sign for life-changing money. They pay a king’s ransom in taxes. They owe more come the tax filing deadline. So in today’s blog, I am going to break down everything you need to know about your MLB signing bonus. You will understand what gets taken out, what taxes you will pay, and the strategies to consider. Let's dive in... The MLB Draft Experience The MLB draft is a life-changing experience for athletes (and their families). Yet, with all that excitement, also comes a world of unknowns. Heck, unless you had family members go through this experience, chances are everything is new. Stack on the fact that everyone has an opinion, comment, or “the way to do it.” The endless sea of information can lead you to be more confused than when you started. Good news, if you want a deep dive into the MLB draft, check out The Moment Guide to the MLB Draft. If you want to understand everything you need to know about an MLB signing bonus, keep reading. We are going to break down this topic into three sections. 1) MLB Signing Bonus Structure The MLB draft is built around a slot system. It works like this: teams are assigned certain picks (slots) in the draft based on how their MLB team performed the previous season. The worst teams get the first picks. The best teams get the last picks. Major League Baseball then assigns a slot value to each of those selections. Add up all of a team’s selections, and that is how you get an MLB team’s collective bonus pool. This is the amount of money a team can spend on its entire draft. Go over that amount and risk paying an overage tax or worse, losing a draft pick in a following year. Teams then draft players based on a combination of talent and their ability to sign for them their assigned slot value. The key aspect to understand outside of the dollar amount is how the bonus is structured. The typical signing bonus is paid 50% in year one and 50% in year two. The first payment, on average, is 30 days after approval of the contract. The second payment, on average, is in the first quarter of the following year. The higher you are picked, the more leverage you have to negotiate the percentages paid in each year. Depending on how you approach your overall tax planning strategy, this greatly affects what hits your bank account. For a full guide on athlete tax planning, check out our Moment Guide on Athlete Tax Planning. The other key structure to understand is the abandonment clause. This is a clause teams try to place in MLB draft contracts that allows them to pull back signing bonus money should a player quit the sport in the first few years. For most players, it pays to remove this clause if the team is willing. The reason is two-fold: 1. It ensures the players will receive all the money. 2. It ensures the signing bonus is taxed as a true signing bonus (more on that later) In short, I want you, the player, to have control over not just your bonus but also your tax planning. Removing the abandonment clause ensures both of those things. In short, every MLB draftee that signs a draft contract will sign a standard MiLB contract. This language is set. Yet as discussed above, there are tweaks to this structure that are critical to understand when it comes to a signing bonus. A properly structured signing bonus ensures you pay the least amount in taxes and control of your signing bonus payouts. 2) MLB Signing Bonus Taxation There is so much confusion around taxes and MLB signing bonuses, and this section will teach you exactly what you need to know. Signing bonuses are earned income, so in short, they are taxed in a similar manner to any salary you earn on the field. Yet how you get paid them, the moves you make around payments, and the planning needed are quite different. For clarity, let’s walk through a hypothetical signing bonus of $2,000,000. Let’s say it is structured as 50% in year one and 50% in year two. Most MLB teams will withhold 22% for taxes from that initial $1,000,000 payment. That means $220,000 goes to taxes and $780,000 goes into your bank account. Now here is where the confusion starts. You will owe more than 22% in taxes on your signing bonus. 22% is a standard tax withholding on the first million of a signing bonus. The top federal income tax rate is 37% and your $1,000,000 payment puts you squarely in that bracket. That means your total tax liability is closer to $370,000 (actually a touch less). But remember, the team only withheld $220,000. So you need to set aside another ~$150,000 for taxes come next April 15 (tax filing deadline). Now the good news is you can (and should be) earning interest on that $150,000 before you have to pay it to the IRS. The bad news is if you don’t have a team that specializes in athlete wealth management you might have a huge surprise come tax season. At Moment, our first move after a signing bonus comes in is running a tax projection and setting aside the necessary money needed to fulfill the full tax obligation. Now, a short aside on state taxes. This blog is not going to dive into the nuances of state taxiation on signing bonus. Yet you need to understand the role state taxation plays in the taxation of your signing bonus. In our hypothetical $2,000,000 example a player in CA would be subject to roughly $208,000 in state taxes while a player with Florida residency would pay no state income taxes. This is another massive tax planning opportunity for MLB draftees and something that we help our MLB draftees with at Moment. Now, onto the strategies you need to consider with an MLB signing bonus. 3) MLB Signing Bonus Strategies There are so many things you “could do” with your MLB signing bonus to maximize it. So I am going to list the four most critical ones to consider, from easiest to hardest. Maximize your MiLB 401(k) Major League Baseball made a massive change in 2024. They created a league-wide MiLB 401(k) plan that newly drafted players are eligible to contribute to. This is the easiest way for any MLB draftee to reduce their current year tax bill. Consider our previous example of a player with a $2,000,000 signing bonus. In 2025, that means a contribution $23,500 into the MiLB 401(k). That equates to a current-year tax savings of more than $8,500. The key factor here is time; in order to maximize this contribution in the year a player signs, it needs to come out of your signing bonus. That means enrolling, setting up, and electing the correct contribution in the first 15 days after a player signs. The reason for this is that most teams require a two-week notice to make any payroll changes. Those changes include 401(k) contributions. Run a Tax Projection You don’t want to be like me and have a surprise tax bill come next April. You want to work with a team that specializes in athlete tax planning. At Moment, we work directly with the team payroll department to source the paystub and run a tax projection, ensuring every player knows what was withheld for taxes and what will be owed come next April. Set Aside the Taxes Owed (but not yet paid) Now, just understanding what you owe is step one. Understanding how to maximize that money is step two. For our MLB draft clients, we use low-risk positions that allow players to earn interest on that money until we have to pay it. In previous years, this has meant thousands of dollars of additional money earned. State Residency Strategy Look, state residency is your biggest move as a current or future MLB draftee. It is the single biggest step to take to save the most money on taxes. Yet to do it correctly, it is a complex step with lots of moving parts. You need to structure the signing bonus correctly, navigate the steps of establishing new residency, and ensure your financial team is working in unison with the MLB team’s payroll department. At Moment, we have walked through this process ourselves and helped MLB draftees navigate these complexities each year. Yet, it is different for each family, so here is my advice ~ Get educated on the options, the pitfalls, the pros, and the cons so you can make an educated decision. After all, we have one chance to do this right. I have an incredible passion for helping the next generation of MLB draftees maximize every aspect of their financial life. That drive stems from personal experience walking in your shoes. Personal experience, knowing how hard it is to make money playing a sport. Personal experience knowing how much subpar information is out there for families. My mission as always is to help you get smarter with your money and I hope this blog helps you and your family navigate the complexities of an MLB Signing Bonus. Moment was built to serve the specific needs of professional athletes. To learn more about how we help book a call today and speak to our team today. Looking for more ways to get smarter prior to the MLB draft - Check out my YouTube page. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions received regarding athletes and money: When does Moment start working with future MLB draftees? We start working with families often a year before the MLB draft. Our goal is to ensure every family is educated on their options and can enjoy the draft when it comes. Does Moment help players with state residency? Yes, Moment has a checklist we walk every player through to ensure they are compliant in navigating state residency. How does Moment work with my agent? Moment works with every major sports agency, and that collaboration ensures all of our athletes maximize not just their signing bonus but their career earnings. Does Moment provide tax planning and strategy for MLB draftees? Yes, we handle all of our athletes' tax planning and team coordination. As part of your team at Moment, you will be working with a sport-specific CPA firm specializing in navigating everything that comes with athlete taxation. *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.

Draft day is electric. Years of work finally pay off - and for the first time, life-changing money is on the table. But here’s the reality no one tells you: That headline signing bonus? It’s not what actually lands in your account. And the decisions you make in the first 90 days determine whether that moment becomes a launchpad for long-term wealth… or a story of missed opportunity. At Moment Private Wealth, this is where we come in. We help athletes take control of the money game - so they can focus on the actual game. The Illusion of the Bonus The average signing bonus of the first 43 picks in the 2025 MLB Draft was $4,338,931. Here’s what that really looks like after taxes and fees: Federal Income Tax (~37%): ~$1.60M Agent Fees (5%): ~$220K State Income Tax (North Carolina @ 4.25%): ~$180K ➡ Total Costs: ~$2.0 million➡ Net in Your Account: ~$2.34 million That means roughly half your bonus is gone before you make a single financial decision. This is why the first 90 days matter so much. The earlier you put structure in place, the more control you’ll have over what you keep. The Payment Schedule: Two Checks, Two Tax Years One often-overlooked detail: your signing bonus usually isn’t paid in one lump sum. For most players, it comes in two installments over two calendar years: First 50% — typically 30-45 days after your contract is approved. Remaining 50% — paid the following year, usually between January and April, depending on the team’s payroll schedule. For example, on the average $4.34M bonus: ~$2.17M arrives within weeks of signing. ~$2.17M comes in early the next calendar year. This structure has major implications for tax planning, cash flow management, and investment timing. Knowing when your money hits is just as important as knowing how much. The higher the draft pick the more leverage you have to negotiate how your signing bonus is paid out. That leverage can open the door to further tax planning opportunities based on the percentage paid out in a given year. State Residency for Athletes Residency is one of the most misunderstood aspects of professional sports. Where you live on draft day has an outsized impact on your finances. MLB spring training happens in Florida (0% tax) or Arizona (2.5%). Establishing residency in one of these states can create six-figure savings. Example: California (13.3%) vs. Florida (0%) on a $4.34M bonus = $576,000+ swing. But this isn’t just swapping your driver’s license. A proper residency plan includes housing, documentation, lifestyle alignment, and ongoing proof to withstand scrutiny from state tax authorities. We guide clients through this step-by-step and coordinate with CPAs, agents, and payroll departments to ensure it’s done right. Retirement Accounts: The Hidden Advantage Most players think retirement accounts are for the future. In reality, they’re a tool to save money now and build wealth for later. MiLB/Solo 401(k): Contribute up to $70,000 and deduct it from taxable income. Backdoor Roth IRA: Add another $7,000 with tax-free growth. Together, these moves can reduce your tax bill by ~$27,500 in year one. More importantly, it jumpstarts compounding - turning today’s dollars into tomorrow’s wealth. Investing Like a Pro Athlete (Because You Are One) Getting money in the door is only half the battle. The real question is: How much do you keep after taxes and bad investment choices? Athletes earn early, peak fast, and face unique risks. That’s why we design portfolios with an emphasis on flexibility and tax efficiency: Municipal Bonds: Generate tax-free income. ETFs & Individual Stocks: Provide more control and efficiency than traditional mutual funds. Donor Advised Funds: Lock in charitable deductions while supporting causes you care about over time. Our goal is simple: growth that matches your career arc and maximizes after-tax returns. Why the First 90 Days Define the Next 30 Years Draft day is a milestone - but it’s only the beginning. The financial moves you make in the weeks after being drafted will echo for decades. This is why Moment Private Wealth exists. We’re not product salespeople. We’re fiduciaries - CFPs and investment professionals dedicated to building financial game plans for top MLB Draft Picks and the games biggest stars at their most pivotal moments. Key Takeaways for Draft Picks Half of your bonus disappears fast — taxes and fees take a huge bite before you ever touch the money. Plan for the net, not the headline number. Your bonus comes in two checks — one soon after signing, the other the following year. Plan for both tax years. Residency is a game-changer — choosing the right state could mean six-figure savings in year one alone. Retirement accounts are tax weapons — use them early to lower today’s bill and build long-term wealth. After-tax investing matters most — the goal isn’t just growth, it’s keeping as much of that growth as possible. The first 90 days set the tone — the right structure now creates clarity, security, and momentum for decades. If you’re ready to see how much of your bonus you can truly keep and how to turn it into long-term wealth, let’s run the numbers and build your playbook today. If you are an athlete or the family of an athlete exploring the MLB draft, connect with our team. Moment was built to serve the specific needs of professional athletes. You can book a call today and speak to a founder. Have more questions? Check out our YouTube page for ways to get smarter with your money. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions received regarding athletes and money: How does Moment help draft picks prepare for the MLB draft? Our focus is on educating families around signing bonus structures, amounts, tax planning, and everything that goes into actually signing your MLB draft contract. What is the biggest tax mistake you see with professional athletes? The biggest mistake we see is not planning in advance. There is a big difference between tax planning and tax preparation. How does Moment work with CPA firms? We work hand in hand with CPA firms that specialize in professional athletes. This way our clients are getting specific advice regarding their tax planning moves. What is unique about tax planning for professional athletes? The short earning arc, multi-state taxation, and income fluctuations provide athletes with circumstances often unique to them. We must account for all of these factors when looking at tax planning for professional athletes. *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.