When you start your career as a professional rugby player, retirement can seem far away. It can feel like you have a playing career and probably a second career to work through, and a lifetime to live, before you need to think about what happens later down the line.
However, this approach may mean you are actually sleepwalking into a retirement crisis where you cannot afford your desired lifestyle, without even having realised it.
In fact, this is a widespread issue for workers in various occupations throughout the UK. As reported by MoneyAge, research carried out by campaign groups the Living Wage Foundation and the Resolution Foundation, found that 16 million people are not saving a sufficient amount that would “deliver an acceptable standard of living in retirement”.
That means a remarkable 85% of workers are not putting enough away now to achieve an “acceptable” retirement, let alone one where they are able to reach their goals for the future.
As a result of what you do for a living, you will have different, very specific concerns to other workers. Yet even so, you may still be one of these individuals in danger of not having what they need for the retirement they want.
So, find out why you may want to consider saving toward retirement sooner than you might think.
Your playing career is not that long, so you need to make the most of your earnings
Firstly, you should consider that your playing career is not actually that long in the grand scheme of your life.
According to figures compiled by rugby fan site RugbyDome, the average length of a career is 13 and a half years for Premiership Rugby players.
Yet while this is such a short span of time, it is hugely significant for your earnings. You will likely have opportunities to earn a living in a second career after you finish playing, but it is still important to build your wealth throughout your time playing professionally.
Saving and investing a portion of your income during this stage can be a sensible strategy, for example, creating a pot for later simply by regularly setting aside some of your earnings.
Having a plan for your finances like this during your playing career also protects you from squandering your money before retirement. It is no secret that many professional sportspeople over the years have found themselves spending more than they can really afford early on in their careers when it feels like the money will never run out.
But with a playing career that will last around a decade and a half, there is of course a limit for how much you can earn. This makes it all the more crucial to manage this money sensibly and carefully, ensuring you have money to live your lifestyle in the future.
You may or may not reach your highest earnings potential during your playing career. Indeed, there is always a chance you will be able to earn more once you hang up your boots and pursue other opportunities
However, this is not guaranteed. So, while you are playing professionally and you have money regularly coming in, you should look at ways to save it for the future.
Starting sooner gives your money more time to grow in the market
A notable benefit of thinking about your finances early on in your career is that it gives you the maximum time to invest your money in the stock market.
There is an old adage about investing your money: it is time in the market, not timing the market. This refers to the fact that investing for the long term is often a more suitable strategy than trying to generate quick returns over short periods, as shown by historical market data.
Data collated by investment provider Nutmeg paints a particularly interesting picture. Looking at global stock market data from January 1971 to July 2022, Nutmeg found that investing for 10 years saw your chances of positive returns reach 94.2%.
Meanwhile, your probability of losses in the same period also decreased with time, falling to almost 0% across 13 years.
Past performance is not an indicator of future performance, and your investments could lose any or all their value no matter how long you hold them.
Regardless, by dealing with your money early on in your career, the additional time that you leave it invested could increase your chances of generating positive returns.
This is true whether you are just starting your playing career, or you are in a second career of coaching or media work. The sooner you make a start, the more time you will have to make your investments.
Setting goals for the future can define how much you need
Beyond practically making the most of your money throughout your working life, another key choice you can make is to define goals for your future.
Whether you have already actively thought about plans for later life, or you just have rough ideas of what you want to do, setting goals for the future can help you make informed decisions with your money.
The lifestyle you want in retirement will have a calculable cost. So, no matter whether you want to go on multiple holidays a year or even continue working while spending time with your family, it is possible to create an estimate of what you might need.
From there, you can then manage your money with those goals in mind, making choices that support these ambitions. This will also ensure that what you want out of life defines your finances, and not the other way round.
Having set goals and knowing how much you will need to live your desired lifestyle can give you a framework for how to manage your money, wherever you are in your career.
Work with us
Want to organise your finances so you can achieve your desired lifestyle in retirement? Get in touch with us at DBL Asset Management. We are specialists in helping professional rugby players like you to make the most of your money.
Email firstname.lastname@example.org or call 01625 529 499 to find out more.
The value of your investment 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.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.