This past few weeks have brought us a flurry of athlete retirement news. From Super Bowl hero Nick Foles retiring to women’s soccer legend Alex Morgan hanging up her cleats, a number of elite athletes have decided that it’s time to step away from the sport that made them famous. For many athletes, this can be a very difficult transition. Not only do they have to switch from training around the clock to surviving on minimum wages, but they also have to find their self-identity outside of their sport.
This can be particularly hard for elite athletes, who often have their lives centered around their sport. In fact, research has shown that elite athletes struggle with retirement because they lose their sense of identity in the non-sport world. In other words, they feel like they are a fish out of water, with no idea who they are without their sport.
But it’s not just athletes who suffer from this problem, parents, partners and coaches can be negatively affected by an athlete’s retirement. Parents and partners will miss going to competitions, while coaches will miss having a student to lead.
It’s therefore important for athletes to start saving and investing early, says Wally Chapman, divisional director at RBC Wealth Management – U.S., a division of RBC Capital Markets, LLC. Investing early means that you can build your wealth over time and benefit from compound interest. It can also help reduce your tax bill when you retire.