Professional rugby is an amazing career that gives you the opportunity to do what you love, travel the world, and build a wonderful life for your family.
However, there are some potential downsides, such as the risk of injury. Rugby is a physical game, and every time you step onto the pitch, there is a chance you could hurt yourself. Many of these injuries are simply part of the job, and you likely expect to take time out to recover occasionally.
Yet, you could sustain a serious injury that means you cannot continue playing at all.
Hopefully, you will never have to face this eventuality, but if you are forced into an early retirement, your income will likely drop significantly.
Unless you prepare for this, you may have to make sacrifices to your lifestyle. More importantly, it could be difficult to save for the future and build long-term financial security.
The good news is, by following these four steps, you can protect your income if an injury means you are no longer able to play rugby.
1. Put income protection in place
Protection is a crucial part of your financial plan because it offers a safety net during difficult times.
Our article on the importance of reviewing your protection has more information on this.
Income protection, in particular, can help you manage your finances if an injury forces you to retire earlier than planned.
This type of protection provides a regular monthly payment if you cannot play due to illness or injury. Most policies offer a percentage of your normal salary, so while you may see your income fall slightly, you can still meet your financial obligations and potentially save for the future.
This crucial buffer means you can remain financially stable after a serious injury, giving you the space to consider your next steps without worrying about how you will pay the bills.
2. Build an emergency fund
Income protection is useful because the regular payments may mean you can cover your general living expenses, even if you lose your earnings overnight.
However, you normally receive a percentage of your salary, not the full amount, so you may have to make sacrifices to your lifestyle in some areas. You might also face unexpected costs such as home repairs, which put additional pressure on your budget.
As such, income protection alone may not be sufficient to maintain your current standard of living, and it may be useful to have other sources of wealth to supplement the payments.
That is why it is important to have a healthy emergency fund.
The general recommendation is to have enough savings to pay your living costs for three months, but you may want to hold more than this.
If you are injured or face unexpected costs outside your normal budget, you can fall back on your emergency fund instead of relying on expensive borrowing.
More importantly, by combining your emergency fund with payments from income protection, you could maintain your quality of life for a certain period of time if you are forced into early retirement.
3. Review your budget
Even if you have income protection and an emergency fund, your savings will not last forever. That is why it is important to review your budget and consider your spending.
Hopefully, you will not have to make too many sacrifices because you have already prepared for a sudden retirement from playing. That said, you might find certain areas where you can make small savings. This means your emergency fund will stretch further, giving you more time to find other ways to earn a living.
We can help you assess your spending and find ways to potentially cut back, if necessary.
4. Explore options for a second career
When your rugby playing career ends, whether prematurely or not, you will likely need to find alternative sources of income.
You might decide to stay in the sport and work as a coach or pundit, or you could do something different altogether, such as starting your own business.
Whatever you decide to do, establishing a second career takes time, and you will not necessarily earn an adequate income from it right away. As such, it could be useful to explore your options while you are still playing, so you can plan ahead.
That way, if you are forced to retire early due to an injury, you may already have alternative income sources to rely on.
Get in touch
To learn more about how you can prepare for your retirement from playing, please do contact DBL Asset Management.
Email enquiries@dbl-am.com or call 01625 529 499 to speak to us today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.