The amount of money that NFL players make is public knowledge, and people are often astounded by the totals -- with some players bringing in $20 million per year or more. However, you may also have heard that many of them will later face bankruptcy, despite earning more in a single year than some people earn in their lives. In fact, some studies have said that 80 percent of players who retire from the NFL go broke just three years later. Why does this happen?
There are many reasons, and every case is different, but some of it just comes down to poor financial planning. Many people who graduate from college never learn about money management, budgeting, and the like. A lot of athletes faces the same challenges, but they just do it with more money.
Divorce can also play a role. In some cases, players may lose 50 percent of their earnings -- which have already been heavily taxed -- to a split. If the player lost roughly half of his "earnings" to taxes and half of the remainder in divorce, he'd be down to 25 percent even without any other financial mistakes.
Furthermore, many athletes simply spend their money as if they'll be making that much forever, when 10 years is actually a very long career. Most are just in the league for a few years, and they suddenly find themselves out of work, not ready to start a new career, and with not nearly enough saved up. A home that is affordable on a $1 million a year salary is quickly not affordable for a player who isn't earning anything.
As this shows, it's important for everyone, regardless of their income levels, to know their legal options when facing bankruptcy.
Source: Forbes, "5 Reasons Why 80% Of Retired NFL Players Go Broke," Leigh Steinberg, accessed March 03, 2017