What Retirees Can Learn from Professional Athletes About Running Out of Money
When most people think about professional athletes going broke, they assume it has nothing to do with their own retirement journey. After all, what does an NFL player making millions of dollars have in common with the average American preparing for retirement?
More than you might think.
Studies have shown that many professional athletes face financial hardship shortly after retirement. One often-cited statistic found that within just a few years of retirement, a large percentage of former NFL players experience bankruptcy or serious financial stress. While the lifestyles may look dramatically different from the average retiree, the underlying financial challenges are surprisingly similar.
The common denominator is this: both retirees and professional athletes often transition from steady earned income into managing a large lump sum of money.
For athletes, it may come from contracts and endorsements. For retirees, it often comes from 401(k)s, IRAs, pensions taken as lump sums, brokerage accounts, or severance packages.
The challenge becomes the same:
- How do you make the money last?
- How do you avoid emotional spending?
- How do you balance enjoying retirement while protecting your future?
- How do you avoid running out of money?
These are critical retirement planning questions for Americans across the country.
The Retirement “Lump Sum” Problem
For decades, many workers received pensions that paid guaranteed monthly income for life. Today, however, retirement has shifted heavily toward self-funded retirement plans like 401(k)s and IRAs.
That means many retirees suddenly gain access to hundreds of thousands—or even millions—of dollars all at once.
At first glance, that may feel empowering. But it can also create risk.
During your working years, you likely operated within a structured system:
- You received a paycheck every two weeks.
- You paid your bills monthly.
- You contributed to retirement savings gradually.
- You adjusted your lifestyle around earned income.
Retirement changes everything.
Now, instead of a paycheck, you may be staring at a large investment account balance. The temptation becomes treating that balance like available spending money instead of viewing it as a long-term income source that may need to last 25–35 years.
That mindset shift is one of the biggest financial challenges retirees face.
Three Major Retirement Mistakes That Can Derail Your Financial Future
1. Failing to Think Long-Term
The first major retirement mistake is not having a long-term retirement income strategy.
Many retirees underestimate how long retirement may last. A healthy couple retiring in their early 60s could realistically spend 30 years or more in retirement.
That means your retirement savings may need to generate income for decades.
Without proper planning, it’s easy to make expensive early-retirement decisions that permanently reduce future financial flexibility.
For example, someone retiring with a $500,000 retirement account might immediately decide to:
- Buy a new luxury vehicle
- Completely remodel the kitchen
- Take expensive bucket-list vacations
- Help family members financially
Individually, none of those decisions may seem unreasonable. But collectively, they can quickly reduce retirement assets by 20%–30%.
What many retirees fail to consider is opportunity cost.
Every dollar spent early in retirement is a dollar that can no longer:
- Generate future investment growth
- Create retirement income
- Provide emergency flexibility
- Help offset inflation later in life
This doesn’t mean retirees should never enjoy their money. Retirement should absolutely include enjoyment and fulfillment. The key is creating a strategy that balances lifestyle goals with long-term sustainability.
A retirement plan should answer important questions such as:
- How much can you safely spend annually?
- What happens during market downturns?
- How will inflation affect future income needs?
- When should Social Security begin?
- How will healthcare expenses be covered?
- What tax strategies can reduce retirement tax burdens?
Without those answers, retirees may unknowingly make decisions that create financial stress later.
2. Trying to Keep Up with Other Retirees
Another major retirement trap is lifestyle comparison.
Many retirees compare themselves to friends, neighbors, former coworkers, or social media posts showing luxury vacations and extravagant retirement lifestyles.
This “keeping up with the Joneses” mentality can quietly destroy retirement security.
You may see friends:
- Taking European cruises
- Purchasing vacation homes
- Driving expensive vehicles
- Traveling constantly
- Renovating homes
But what you don’t see is their full financial picture.
They may:
- Have pensions you don’t have
- Have inherited wealth
- Carry debt
- Be overspending unsustainably
- Be making risky withdrawals from investments
One of the strongest predictors of retirement success is surprisingly simple:
Living within your means.
That may sound basic, but it remains incredibly important.
Retirement success is often less about achieving massive investment returns and more about controlling spending behavior.
Retirees who stay disciplined, avoid lifestyle inflation, and maintain realistic spending expectations often place themselves in much stronger long-term financial positions.
3. Financially Supporting Too Many Other People
The third major retirement danger involves financially supporting family members, adult children, or friends beyond what is sustainable.
This is one of the hardest financial challenges retirees face emotionally.
Parents naturally want to help children. Grandparents want to support grandchildren. Family members may ask for loans, housing assistance, tuition help, or emergency support.
However, retirees must remember an important principle:
You cannot sacrifice your retirement security to solve everyone else’s financial problems.
Many retirees underestimate how financially damaging ongoing support can become.
Examples include:
- Adult children moving back home
- Helping children with recurring bills
- Supporting aging parents
- Co-signing loans
- Funding relatives’ business ideas
- Providing repeated “temporary” assistance
Even relatively small recurring expenses can significantly impact retirement sustainability over time.
Retirees should prioritize their own financial stability first. Otherwise, they may eventually become financially dependent themselves.
It’s similar to the airplane safety instruction:
Put your own oxygen mask on first before helping others.
The Psychological Side of Retirement Spending
One of the biggest overlooked aspects of retirement planning is psychology.
Retirement is not only a financial transition—it’s an emotional transition.
People often retire after decades of hard work thinking:
“I deserve to enjoy this money.”
And they do.
But retirement planning requires balancing present enjoyment with future security.
That balance becomes difficult because retirement may still last decades.
Many retirees struggle with delayed gratification after spending years saving and sacrificing during their working careers.
That’s why retirement planning should never focus solely on investments. A complete retirement strategy should also address:
- Spending behavior
- Income planning
- Risk tolerance
- Healthcare costs
- Long-term care concerns
- Tax efficiency
- Estate planning goals
Why Retirement Planning Requires More Than Investment Advice
Many people assume retirement planning is simply about achieving the highest investment returns possible.
In reality, successful retirement planning is much more comprehensive.
Retirees need coordinated strategies that address multiple moving pieces simultaneously.
That includes:
- Social Security optimization
- Required minimum distributions (RMDs)
- Tax-efficient withdrawals
- Healthcare planning
- Income sustainability
- Investment allocation
- Risk management
- Legacy planning
Focusing exclusively on investment growth without considering the broader financial picture can create unnecessary risk.
For example, retirees taking excessive market risk simply to chase higher returns may expose themselves to major losses during market downturns—especially early in retirement when withdrawals are beginning.
This is sometimes referred to as “sequence of returns risk,” and it can significantly impact retirement sustainability.
A thoughtful retirement strategy should focus on balancing growth, income, flexibility, and protection.
Retirement Is About Freedom, Not Financial Stress
The ultimate goal of retirement planning is not simply accumulating wealth.
It’s creating financial freedom.
Retirement should allow you to:
- Spend time with family
- Travel confidently
- Pursue hobbies
- Volunteer
- Enjoy flexibility
- Reduce financial anxiety
But achieving that freedom requires intentional planning.
Without a strategy, retirees may accidentally repeat the same mistakes that have hurt many professional athletes, lottery winners, and other individuals who suddenly gained access to large amounts of money.
The good news is that these mistakes are avoidable.
With proper planning, disciplined spending, and a long-term mindset, retirees can build sustainable income strategies designed to support both their lifestyle and future financial needs.
Questions Retirees Should Ask Before Making Big Financial Decisions
Before making major financial moves in retirement, consider asking:
- How will this decision impact my long-term income?
- Will this purchase still make sense 10 years from now?
- Am I reacting emotionally or strategically?
- Have I accounted for inflation?
- How will this affect my investment withdrawals?
- What happens if markets decline?
- Could this create financial stress later?
Those questions can help retirees slow down impulsive decisions and focus on long-term sustainability.
Final Thoughts
Retirement planning is about more than numbers. It’s about creating a strategy that supports the life you want to live while protecting against unnecessary financial risk.
The retirement mistakes that affect professional athletes may sound extreme, but the core lessons apply to everyday retirees across America.
Whether you retire with $300,000 or $3 million, the same principles matter:
- Think long-term
- Live within your means
- Avoid emotional spending
- Protect your future income
- Have a comprehensive retirement strategy
Retirement can be one of the most rewarding phases of life—but only if your financial foundation is built to support it.
Retirement Planning Q&A
Why do retirees run out of money?
Many retirees run into financial problems because of overspending, lack of long-term planning, inflation, healthcare costs, poor investment decisions, or helping family members beyond what is sustainable.
What is the biggest financial mistake retirees make?
One of the biggest mistakes is treating retirement savings like unlimited spending money instead of a long-term income source designed to last decades.
How much should retirees safely withdraw from retirement accounts?
The appropriate withdrawal rate depends on factors such as age, investment allocation, market conditions, taxes, spending needs, and longevity expectations. Personalized planning is important.
Why is retirement planning more complicated today?
Traditional pensions have become less common, meaning more retirees are responsible for managing their own investments, withdrawals, taxes, and income strategies.
Should retirees help adult children financially?
Helping family can be meaningful, but retirees should prioritize their own long-term financial security first to avoid creating future financial hardship.
How can retirees create more sustainable retirement income?
A comprehensive retirement strategy that includes budgeting, tax planning, investment management, healthcare planning, and income coordination can help retirees build more sustainable financial plans.
Daniel Wendol
Item #1
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78% of this group of Americans goes broke within the few years of retirement what a sensational stat I want to talk about who these people are and how you can avoid the same fate but before I do I want to give my co-host Tony Shore there he is Tony welcome I’m gonna give you the opportunity to Guess Who these who this group is 78% of which go broke after a few years of retirement who do you think that is careful it’s a group I’m trying to figure out if it’s uh people who retire early is the group that’s one
00:00:46
possibility or um uh I would say um baby boomers but uh I don’t know um 78% is a lot though and I don’t think 78% of Baby Boomers go broke within a few years of retirement so that can’t be it um what group could it possibly be um I’ll give I I’ll give the viewers a hint I’ll give tony a Hint by telling viewers when you hear it you’re G to groan and be like oh that’s not me that I don’t relate at all doesn’t apply and you’ll want to turn it off but don’t because the lessons
00:01:27
learned from this okay apply to you um directly to you listener uh 78% of this group um boy I don’t know um I don’t know Dan that’s a tough one here we go quote within five years of retirement well estimated 60% of former NBA players are broke this is a Sports Illustrated article oh come on yeah no doubt I mean okay here’s another one by the time they have been retired for two years 78% of former NFL players have gone bankrupt or or under Financial stress because of joblessness or divorce
00:02:12
this is from a Sports Illustrated article and right I’m telling you listen don’t shut this off because this of course because they retire at a young age and they’re irresponsible with their money I mean that’s just well that’s a stereotype that is obviously true true I mean professional athletes yes I’m telling you Tony it’s so relatable to retirees the Baby Boomers anyone that’s 60 right now thinking they’re going to retire this year I’ll tell you why this
00:02:44
and we’re gonna learn from this here’s here’s the one reason right Tony lump some 401K at retirement how do you handle it you worked you get your salary you you you spend some to live you you check you balance every month but then you retire and you got this giant lump sum because pensions are gone you got this giant lump sum sitting there what do you do spend it it’s no different it’s not well the main difference between a professional running back is that their career is three and a half years right on average
00:03:22
um but it’s similar in there’s a lump sum and it’s kind of like you come into this money how do you handle it how long is it going to last especially if you were a big spender or used to spending a lot and living lavishly before retirement you get into retirement and you get the big sum of your retirement fund and it’s just like you know you’re gonna spend it and and so if you’re a spender when you say oh of course these athletes of course the NFL you know quarterback’s going to run out of money
00:03:58
because they’re crazy they live crazy lifestyle I don’t live that lifestyle it’s all relative okay so their Fall From Grace is much more dramatic now granted they might retire at age 30 and they have to go for another you know 60 years whereas you retire at 60 and have to go another maybe 30 years it’s different there but the same principles apply I want to bring in because that was from a Sports Illustrated article I watched uh we did a show over a year ago I believe um where Shannon sharp who’s a
00:04:33
former NFL player interviewed Chad ooso who’s a former NFL wide receiver they both were you know he was a tight end and and so um we I’ll put the show up here for those that didn’t see it right um that is really relevant to this conversation because Chad choso talked about how he didn’t spend a lot he saved a lot of his money and he was vilified he was the black sheep he was different than most of the other Sports athletes and celebrities um so I I watched that show again it’s called Club sh Shay it’s
00:05:07
Shannon Sharp’s podcast and he had Charles Barkley on this most recently Barkley referenced the Sports Illustrated article and he said he messed up but he started talking about certain people uh he said Dr J gave him great advice um he was talking about uh an athlete that I hadn’t heard of that played basketball in the 70s and how he’s the best was the first billionaire but no one knew about it because he just bought restaurants and he was quiet about it but he didn’t make a lot of
00:05:36
money relatively speaking he did but he didn’t spend it he didn’t have a big name so um watch that uh old podcast from us if you if you have a moment but look at this Tony I said that 78% sounds so dramatic Sports Illustrated I don’t buy it so I look for some other statistics and the National Bureau of economic research and I put the link down here for people bankruptcy rates among NFL players with shortlived income spikes here’s the quote from what I found here we find that initial bankruptcy filings begin
00:06:11
very soon after retirement and continue at a substantial rate through at least the first 12 years of retirement end quote and here’s another one quote bankruptcy rates are not affected by a player’s total earnings or career length having played for a long time and being well pa paid does not provide much protection against the risk of going bankrupt so you might say oh they only get three years of you know multi-million dollar salary and then they’re out but what this says no the research says even if you’ve been a
00:06:43
well-paid player for years you still have a high risk of going bankrupt yeah lifestyle and they were saying about 16% go bankrupt which is crazy high yeah so the question is do traditional retirees go bankrupt or run out of money and you know I don’t like The Sensational fearmongering that says oh we’re all going to run out money buy buy right Insurance product I don’t subscribe to that but I do believe a lot of retirees face a very similar situation and they often make mistakes and I want talk about the top
00:07:26
three first one being they don’t have a long-term plan now this is the obvious one you know especially for the professional athlete yeah are we surprised that Charles Barkley didn’t have a long-term plan he did not he said he said Dr J said to him hey um you have six cars how many cars can you drive at a time and he’s like one he’s like yeah well why do you need six right and even Barkley’s like I messed up he’s like but now I’m trying to tell these young kids and I’m
00:07:55
not against the young kids but you know when when they when you buy a new car and you’re putting rims on they’re like what kind of rims you want he’s like I can’t see the rims when I’m driving so obviously it’s to show off to show other people to Signal um so that’s the second one which is keeping up with the Joneses but going back to this first one if you don’t plan for the length of time you need the money for you might do some poor decision you might make some poor decisions right
00:08:25
example Tony you retire and you’re 62 so when you’re not a professional you made 80,000 at your Peak right and now you have 400,000 lump sum coming to you and the first thing you do is say well I’ve been meaning to get a new car I need one my car is eight years old but I want a nice one I’ve always wanted fill in the blank and my wife’s been wanting that new kitchen and let’s just do it well how much is it 60,000 ah I got 4 400 and now you’re gone 100 a quarter of your money is gone for two things now
00:09:06
not saying you don’t need a car or a kitchen but did you think through the long-term impact of that because now that’s $100,000 less that you can use to generate income for the future so it happens it’s not buying going to on jet setting and and getting a diamond ring and spending 4 million on a a night in b professional athlet but it’s magnitude is similar sure yeah that’s a really good point two simple things that a lot of people are thinking when we retire let’s remodel let’s get the new vehicle and
00:09:44
that’s that doesn’t sound that unreasonable but when you’re on a fixed budget and you have a sudden yeah right but you but you’ve work your whole life to get to this point why should I deny myself this and I’m not saying to deny but delayed gratification is huge and you have to have a plan you can’t just do it yeah do if you run the numbers this is where the question that a lot of our listeners and viewers asked Dan is why do I need to work with a financial professional why
00:10:16
do I need Dan Wendell it’s because you need a plan for retirement or you could end up like these guys uh on a different scale probably but and maybe not as quickly but you know a couple of simple things that you think you should you deserve and you need and you could derail your whole retirement and run out of money uh but if you have a plan and work with someone like Dan Wendell then you can avoid those costly mistakes and have a plan and maybe still spend money on yourself but have a plan in place to
00:10:51
do it so you don’t deplete your you know source of income and uh you know don’t uh spend down that uh you know the power of compounding interest right that’s it and it’s not oh I’m not I’m gonna prevent the average retiree from buying six cars because that’s ridiculous because that’s how what people think about sports athletes they think that’s why they’re bankrupt they have six cars but you could go bankrupt buying one or two cars right you can one bad decision
00:11:19
also it’s the opportunity cost of doing that thing versus investing it for the future and a lot of in our last show which was very popular how much cash do you keep on hand I made the point that the amount of cash you keep on hand shouldn’t be to grow wealth it should be to protect against you making a poor decision elsewise sure with your other money that you’re still investing because when you’re 60 you’re not going to die tomorrow now you might but and you don’t want to hoard your money but
00:11:50
you need to prepare for 10 years out and and think that way so the second problem is keeping up with the Joneses and that was the chat Joo story and this is you know um Charles Barkley talking about how you know you don’t need to have do you really need to have rims you know that kind of stuff um I think retirees do this as well the traditional typical retirees is oh they’re going on that European cruise I need to go on that European Cruise well you know don’t have to you don’t have to keep up with the
00:12:22
Joneses and the night we did a show that the number one success factor the number one Far and Away to determine whether or not you’re going to have retirement success is living within your means not keeping up with the Joneses right and the third one and this one was brought up by Charles Barkley and Barkley man ment tell I’m on I’m high on him Financial he’s he’s a guru he said um helping family and friends he said that when uh he and he mentioned he had Financial people help
00:12:56
him when he was still you know just coming out of uh basketball retirement and as he was still playing toward the end and they said to him Charles chuck whatever um why are you why are you giving money to eight people who are these like why are you supporting eight people and he said you know I help my mom and dad if they needed maybe brother sister but yeah your friends that give you money and I I think the quote something along the lines of when you the problem with giving these friends money is the first time you say no
00:13:33
they’re not going to be your friend anymore and he’s like I had to learn that lesson the hard way he’s like but if I could teach that to the community of athletes that you know you just can’t support all this you gave the story years ago about MC Hammer right how he had his Entourage yeah he had like at least eight people in his P posi or Entourage yeah you know so does this apply I mean applies to lot winners you know we’ve done shows on that where Lotter winners all of a sudden you win a lot
00:14:05
all you’re going to get phone calls from long lost cousins hey I got this business idea right um and you feel like I got all this money why not it’s because it’s not sustainable and so when I say the the three biggest punches to retirement success the things that will knock you down to bring up another athlete like Tyson one of them is a needy family member and that could be an aging parent or a child coming back to you you have to protect yourself you have to make sure that you put the the
00:14:34
oxygen mask on first and then help your your sibling or your your son or your parent I think that’s really important lesson here and the younger you are the harder it is to realize that that’s not sustainable as you get older you start to realize man I I I gotta worry about myself a little bit here but it’s so hard to say no to family you just gotta you got to draw the line it it’s never good when you become when you have more dependence as you retire it’s just not a good scenario so you got you got to draw
00:15:06
the line and that’s the tough one I’ve always said that’s the toughest one to say no to like your kids come to you now Tony your son he’s independent he’s married he comes to you and says Dad Mom help help me out here are you gonna be able to say no you know is that it I’m I’m I’m hoping that doesn’t happen but if it does it’s I can but the other half can’t that’s harder harder for her you know you might say oh if I if I retire and my you don’t have siblings but if
00:15:41
your kids come you can say no but what if your wife’s siblings say Hey you know we need help it’s easy for you to say no like but your wife you’re right it’s a good point your spouse needs to be on the same page here yeah so to conclude large amounts of money that should be used for retirement difficult to handle don’t fall victim to the professional athlete trap when you retire and get that lump sum oh instead of taking a pension I’m gonna take a lump sum because I can control it I get to keep
00:16:14
it in the family do you control it do you have control of it that’s the first question yes technically you have control of that asset but do you have control of yourself to then control it and delayed gratification is Big think long term uh like I say to people when you retire you’re not going to die that’s not the plan the plan is to live and not have to work the plan isn’t you work and die right so right when you’re building that retirement plan you gotta think all right how long am I G to go
00:16:53
think about it’s a horrible discussion right you know but think about your parents think about longevity and realize that the longer you live the longer you’re going to live statistically speaking which sounds crazy but you got to think long term true good point yeah so you gota you you this is why and we did a show why you should play the lotto I tell people to play the lotto but it’s not for the same reason why it’s not to win it’s not to win it’s to think about what you would
00:17:23
do if you won because you just you got to think about what you’re going to do in your retirement you just don’t retire and then say all right now what because that’s when it’s very easy to to do the redo the house that’s when it’s very you could 30% of your income uh your savings can be gone in in a week if if you play your cards right well I think this problem that people run into when they get access to the big lump sum that they’ve saved up and a lot of people can
00:17:49
make big mistakes I think the number one solution is H work with a financial professional and I’m not just saying that to plug you Dan whether you know if you already have a good Financial professional you know of if they’re a fiduciary and looking out for your best interest work with them and if you want to work with Dan give Dan a call but I I just think that’s the key to this issue and I think that there is there is a caveat to that though or call Charles Barkley I mean apparently he’s got some
00:18:16
good advice you call a financial advisor they’re gonna talk a lot of them we’ll talk about let’s invest that money and that’s another fault that a lot of you put a lot of trust in someone they go crazy and take tooo muchis risk you know it’s like well you’re only 30 you got you’re only 60 we could take some and and there’s nothing wrong with risk but I would recommend you talk to a certified financial planner who’s going to look at the big picture to factor in
00:18:42
right health insurance and Estate Planning and all the P taxes so that it’s not just well let’s figure out how to get the best return because that’s not the answer the answer is how do we get the best income how do we all fit together so I agree with that well well Dan I think the answer is to work with a financial Prof profal who is on a first name basis with Charles Barkley you obviously call him Chuck yeah you and Chuck are tight you and Chuck are tight assist I’ll we’ll play the rest of
00:19:10
us Charles yeah he’s gonna see this show and go who is this guy Let’s uh Chucky I’ll have my people talk to him all right thanks for a good show show Tony I’ll I’ll see you next week with my cease and assist from my good boy Chuck barley all matters discussed in today’s show are for informational purposes only this show is not investment advice the M nor dolphin Financial Group are affiliated or endorsed by any government agency investment advisory services are offered through Dolphin Wealth Management Inc a
00:19:46
registered investment adviser in the State of Florida Insurance products and services are offered through Dolphin Insurance Inc dolphin Wealth Management Inc and dolphin Insurance Inc are affiliated companies doing businesses as dolphin Financial group you should talk to someone at dolin Fina group before implementing any of these strategies or ideas