Do NBA players get a pension when they retire?
Yes, they do.
As of the latest CBA (Collective Bargaining Agreement), retired players receive around $1000 per month for each year of service in the league.
While it may seem like pennies compared to the average player salaries, it’s much better than nothing!
Read on for more interesting NBA pension details like:
- How much is the NBA pension?
- What is the NBA pension age?
- Other NBA retirement benefits
- and more…
Let’s get started!
How much is the NBA pension?
Players receive exactly $1,001.47 every month for each year they play in the NBA. Here is the official jargon from the 2023 CBA:
As of the effective date of this Agreement, the monthly amount per Year of Credited Service payable as a Normal Retirement Pension (the “Monthly Benefit”) is $1,001.47.
2023 NBA-NBPA CBA (Article IV, Section 1)
Example:
John played 5 years in the NBA before retiring. Once he becomes eligible to receive a pension, he will receive $5007.35 every month from the NBA Pension Plan (5*1001.47).
NBA Pension Amounts over the Years
The previous 2017 CBA paid players just $572.13 per month for each year of service in the NBA.
The 2011 CBA paid players $518.92 per month.
That’s only about half as much as the current agreement!
It seems the NBA Player’s Union is doing well for its members.
Maximum Pension Amount
According to the IRS, the maximum annual amount cannot exceed $265,000.
So, if a player theoretically played 30 seasons in the NBA, he would still only be able to receive $265,000 per year.
Note: Vince Carter has played the most seasons in NBA history with 22. Based on the current CBA, he would be set to receive $22,032.34 per month ($264,388.08 per year) once he is eligible for his pension. 💰💰💰
What is the NBA Pension age?
There are actually two retirement pension ages in the NBA:
- Normal Retirement
- Early Retirement
Normal Retirement Pension
The “normal” retirement age is 62 years old. Players will start receiving pension payments on the first of the month after their 62nd birthday.
They will receive the normal amount stated above ($1,001.47 per month for each year of service).
Early Retirement Pension
The “early” retirement age is 45 years old. Players can choose to start receiving payments as early as their 45th birthday.
The amount received will be less than normal, as they will be receiving payments over a longer period of time. The exact amount depends on when the player chooses to start receiving pension payments. The amount is decided using “modified actuarial equivalence factors”.
What Counts as a Year of Service towards NBA Pension?
So, what actually counts as a “year of service” for NBA pension?
What if the player only played one game? Will he still be credited for a year of service? What about Two Way players? Do they count?
When determining minimum player salaries, a player is simply credited with a year of service if they are listed as active or inactive on a roster for at least one day during the NBA regular season.
Unlike minimum player salaries though, a year of service for the “Pension Plan” is not counted the same:
Under no circumstances shall the definition of Years of Service herein be used for purposes of determining a player’s years of credited eligibility, benefit, and/or vesting service under any benefit plan or program provided for under Article IV of this Agreement, including, without limitation, the Pension Plan, 401(k) Plan, Health and Welfare Benefit Plan (including the Retiree Medical Plan, HRA Benefit, and tuition reimbursement program), or Post-Career Income Plan.
2023 NBPA CBA – Article 1, Section 1, (iiii)
I can not find a copy of the actual NBA Player’s Pension Plan online, so am uncertain what is considered as a “year of service” for pension.
It may be the same as how Two Way Players are counted. See below:
Two Way Players
In the past, G League Two Way players were excluded from receiving NBA pension.
This was changed in the most recent 2023 CBA. A Two Way player is now eligible to receive pension if either:
- He is on any NBA team roster as of February 2nd of the regular season (Active List, Inactive List, or Two Way List)
- He is on the Active List of any team for 50% or more of the regular season games
What are other benefits for retired NBA players?
Apart from a decent pension, former/retired NBA players also get the following benefits:
- 401(k) plan
- Health Benefits (i.e. Medical, life insurance)
- Tuition Reimbursement
- Post-Career Income Plan (i.e. Annuities)
- Access to health, career and financial education programs
FAQ
What is the average NBA retirement age?
The average career length of an NBA players is around 5 years.
Most players are out of the league by the time they are 30 years old. They are not technically retired, but just no longer have a roster spot in the NBA.
Based on these rough numbers, the average player will have a pension of around $5000 per month after they turn 62 years old.
Does Dennis Rodman get a pension?
Yes, Dennis Rodman gets a pension.
Not sure why this is such a searched for query, but it is.
Rodman turned 62 years old in May 2023, so qualifies for the normal pension amount (if he didn’t already apply for early retirement pension).
“The Worm” played 14 seasons in the NBA with 5 different NBA teams (Pistons, Spurs, Bulls, Lakers, and Mavericks).
Based on the most recent CBA, Rodman should receive around $14,000 per month or $168,000 per year in pension payments.
Does Michael Jordan Get a Pension?
Jordan was born on February 17 1963, so he is not yet 62 years old.
He thus does not yet qualify for the normal pension amount, but can still apply for early retirement pension if he wants.
The GOAT is worth around $2 billion though, so he is probably not in any rush to collect retirement checks.
When Jordan turns 62, he will still get a nice pension from the NBA. MJ played 15 seasons in the NBA, so would receive around $15,000/month, or $180,000/year in pension payments.
Summary
The NBPA has set up a very generous pension plan for its players.
If you can play in the NBA full time for more than a few years, then you really may be set for life (financially at least).
Of course, there are many stories of NBA players going broke despite their large salaries.
What do you think of the NBA pension? How does it compare to your pension? 😅
Let me know in the comments below!
It is great that the player gets a pension, even after one year. What happens to their pension if they pass away before they draw payment? What happen to the spouse if they pass away?
Hi Robert,
I think that probably depends on the player’s personal will
My name is Clay Johnson, Lakers 81-82, Lakers 1982-83, Sonics 1983-84. Played 3 seasons in NBA. When filed for pension I was told I didn’t get it because I signed back with the Lakers in April after being cut from start of season. Was there for remainder of season and playoffs. Recieved playoff cut and championship ring. I was told that time I spent with lakers does not count but I have the ring . I have seen several articles plus artcle #85 under the collective bargaining agreement that states one game under contract during regular season gets you credit for one year of service. But when apply I get denied. There should be a way Since I am soooo close that I should be approved for my pension. I amagine there could be a few more players like myself that are so close. We should be rewarded if not a full pension, at least 3/4 of a full pension
Hi Clay,
Thanks for visiting. Sorry to hear about your struggles receiving your pension. It seems that my original article was a bit off, and that a “year of service” is actually counted differently for the NBA pension plan vs. minimum salaries / Collective Bargaining Agreement:
So, it seems that one game does not equal a year of service with regards to the pension. I can not find a copy of the actual NBA players’ pension plan online, so am not sure exactly how they count. In the latest CBA, they do state how Two Way players are counted:
In any case, I do hope that you receive some sort of pension from the NBA. I am not a lawyer, but it seems you should qualify for at least one year. I wish you the best of luck in your appeal.