NBA Pension Plans – [Qualifications, Terms, and Types]

With the average retirement age for NBA players at 34 years of age, it’s becoming more and more important for basketball players to consider all of their retirement benefits. Despite making millions of dollars throughout their careers, approximately 60% of former basketball players are broke within five years of retirement. Professional basketball players owe it to themselves to get familiar with their pension options so they don’t become part of that statistic.

NBA Pensions Explained

A pension is simply a fund that an employer commits funds to during the employee’s tenure. NBA players are athletes, but they are also employees of the organization they play for. The NBA has a long history of providing players with flexible retirement options specifically regarding pension plans.

NBA pension plans have been around since 1965 and have offered players great options once they are eligible. In addition to pension plans, the NBA also offers players access to health care benefits, disability benefits, and education tuition through endowments. Below are the pension qualifications for NBA players to be eligible for a pension

  • Minimum of 3 years in the league, an NBA player qualifies for a pension
  • The maximum pension is extended to players with at least 10 years of service
  • Qualified NBA players can receive pension distribution starting at age 45, however, they will get a reduced benefit amount
  • Regular pension distributions start at age 62 unless a player qualifies earlier due to a disability

How Much is the NBA Pension For Retired Players?

This will depend on if the player qualifies for the minimum or maximum pension benefit. It will also depend on when players decide to start taking distributions.

  • The minimum pension benefit extended for players at age 62 is $57,000 per year
  • The maximum pension benefit for players at age 62 is $200,000 per year

These are very generous pension benefits. This is just for pension benefits. In addition to this, the NBA also provides players with 401(k) retirement which can further fuel their retirement savings.

NBA Pension Kicks in at What Age?

NBA players can start taking out their pensions starting at age 62. This is the age for players to get the full pension benefit depending on whether or not they qualify for the minimum pension or the maximum pension. If they wait until they turn 62 years of age to start drawing on their pension, they will pull the maximum benefit.

  • For example, a 62-year-old NBA retiree that qualifies for the minimum pension benefit will receive $57,500 per year or approximately $4,791 per month
  • A 62-year-old NBA retiree that qualifies for the maximum pension benefit will receive $200,000 per year or approximately $16,666 per month

As you can see the difference between the minimum and the maximum benefit is significant. Due to the fact that 60% of NBA players go broke within 5 years of retiring from the league, having a pension in place does provide them with some income protection down the road.

What Counts For Playing a Season Towards an NBA Pension?

An NBA player doesn’t actually have to play a full season in order to qualify for a pension. A player simply has to be “on contract” for at least one game during the regular season.

It doesn’t actually matter if a player even played a single game. The player just has to be in a contract for a single game of the regular season. As a player, you could essentially ride the bench for 3 seasons and qualify for the minimum pension benefit. This is a great benefit for NBA players who have a short career due to injury or other causes.

What is the Average NBA Pension?

This is a difficult figure to estimate due to the lack of data of when NBA players actually start drawing on their pensions. There are players who start drawing their pensions well before age 62 due to prevailing income needs.

There are also players who will start taking draws at age 62 in order to get the maximum amount they can. It all depends on their needs and financial situations.


How Much is Dennis Rodman’s Pension?

There is plenty of speculation about how much money Dennis Rodman receives from his NBA pension. The true number is unknown. However, considering the NBA pension qualification rules, it’s estimated that he will receive at least $200,000 per year at age 62. This is due to the fact that he had 13 years of service in the NBA which qualifies him for the maximum pension benefit.

Does Michael Jordan Get a Pension?

Although Michael Jordan is a billionaire and really has no financial need for a pension plan, he qualifies for the maximum pension benefit at age 62.