Retirement Planning Starts Now: Using Roth IRAs and 401(k)s to Your Advantage
When you’re a student-athlete earning NIL (Name, Image, and Likeness) income, retirement may feel like it’s light-years away. You’re focused on practices, games, schoolwork, and maybe your next NIL deal—not what life looks like at 60. But here’s the truth: the earlier you start planning for retirement, the easier it becomes to build lasting wealth.
By taking advantage of accounts like Roth IRAs and 401(k)s now, you can turn today’s NIL money into a financial foundation that supports you long after your playing days are over.
Why Start Retirement Planning Early?
Two words: compound growth.
The money you invest in your late teens or early twenties has decades to grow. Thanks to compounding, even small contributions now can become significant wealth by the time you retire. Starting later means you have to save much more to reach the same goal.
What Is a Roth IRA?
A Roth IRA (Individual Retirement Account) is one of the best tools for young earners like NIL athletes.
Contributions are made with after-tax money. That means you don’t get a tax break today.
Withdrawals in retirement are tax-free. Once you turn 59½, you can take the money out without paying taxes on the growth.
Flexibility: You can withdraw your contributions (not earnings) at any time, penalty-free—making it more flexible than many retirement accounts.
Why it’s great for athletes: You’re likely in a lower tax bracket now than you’ll be later in life. Paying taxes on your contributions today means your money grows tax-free for decades.
What About 401(k)s?
A 401(k) is a retirement plan typically offered by employers. As a student-athlete, you may not have access to one until you work for a company after graduation. But understanding how it works prepares you for the next stage of your career.
Contributions are pre-tax (for traditional 401(k)s), lowering your taxable income now.
Employer matching: Many companies match part of your contribution—essentially free money.
Higher contribution limits than IRAs, allowing you to save more each year.
Tip: When you enter the workforce, contributing enough to get the full employer match should be a top priority.
Roth IRA vs. 401(k): Which Should You Use?
While in college with NIL income: a Roth IRA is usually the best choice since you may not have access to a 401(k).
After college: use a 401(k) (especially with employer matching) and continue contributing to your Roth IRA if you qualify.
Together, these accounts can build a strong foundation for long-term wealth.
How NIL Athletes Can Get Started
Confirm eligibility. NIL income counts as earned income, so you may qualify for a Roth IRA.
Open an account. Many online brokerages allow you to start with as little as $50–$100.
Start small, but stay consistent. Even $100 a month can grow into six figures by retirement.
Invest in simple funds. Low-cost index funds or ETFs are great beginner-friendly options.
Final Takeaway
Retirement planning isn’t just for “older people”—it’s for anyone who wants financial freedom in the future. As a student-athlete with NIL income, you have a rare chance to start earlier than most. By using tools like Roth IRAs now and 401(k)s later, you’ll set yourself up for success both on and off the field.
Your NIL checks may feel like short-term wins, but when invested wisely, they can become the building blocks of lifelong wealth.
