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Endgame: Retirement for pro athletes—and their Gen Y fans

The end game: Athlete retirement
The end game: Athlete retirement

Even though professional athletes can earn millions of dollars during their careers, they have a greater-than-average risk of outliving their savings, since their retirements may need to last 50 years or more.

In this video segment, CNBC senior personal finance correspondent Sharon Epperson discusses a retirement game plan for young 20-something athletes—and their millennial peers in other professions—with Mike and Ryan Alfred, founders of financial information company BrightScope.

Ryan Alfred, chief operating officer, points to the NFL Player Second Career Savings Plan, with a BrightScope rating of 91 out of 100, as one of the top such plans available to professional athletes. However, he said, "we're really measuring the ability of people to accumulate the assets, but it doesn't really measure ... how well participants are able to 'decumulate' those assets and take that money."

Thomas Barwick | Getty Images

"Since NFL athletes have a longer retirement period than the average American [retirement plan] participant ... they might have particular challenges that really aren't addressed by our ratings," Alfred added. Contributing solely to qualified employer-provided plans like the NFL's might not get professional athletes "where you want to go."

High-earning athletes who will make more over a shorter period of employment than other workers will also want to consider other types of investments, said Mike Alfred, BrightScope's CEO. "That may be a luxury for most people ... but if you have the option of saving in other places—starting a business, investing in real estate, creating personal savings—that makes a lot of sense," he said.

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In addition, Alfred said he thinks most younger pro athletes are going to need at least one more career in their working lives in order to fund their retirements. "I don't think most athletes are going to be able to retire simply from playing for three to five years," he observed, although that "depends on their lifestyle."

Studies have shown that, in general, all millennials—athletes or not—show a greater propensity to save, and save more, but many don't know where and how to invest. Qualified retirement plans—many of which, for all their shortcomings, now offer automatic enrollment and deferral-amount increases—are a great place to start, said Ryan Alfred. He noted that deferrals on the order of 10 percent to 15 percent of annual income are "really what you need to save year in, year out in order to retire at standard retirement ages."

"I like to say, 'Save 'til it hurts,'" he added. "If you've been defaulted [into an employer plan], that's a great thing for you. ... And stay in."

Traditional financial advisors, as well as the ever-growing inventory of online wealth-management options—sometimes known as "robo-advisors"—can provide guidance as to how and where to invest from there, whatever an investor's assets.

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