The Bobby Bonilla Retirement Plan

While I’m not much of a baseball fan, I am a sports fan in general and pretty familiar with Bobby Bonilla, who played for a number of teams – including the Pittsburgh Pirates and New York Mets – between the mid-80s and 2001.

I was certainly interested to recently read that while Bonilla hasn’t played in a professional baseball game since 2001, the New York Mets pay him $1.19 million every July 1st and will continue to do so every July 1st until 2035. This money is part of a deferred contract the Mets negotiated with Bonilla after the 1999 season. Instead of paying him $5.9 million that year, the Mets would owe Bonilla almost $30 million over the course of the deferred contract.

That, my friends, is a serious retirement plan and a great lesson in the time value of money. And how does Bernie Madoff, the infamous investment advisor and financier, fit into this? Spend 10 minutes with the video above to learn more.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

7 Comments

  1. As a Met fan this hurts to read. They have not been smart with their money, but seeing how the deal worked out it wasn’t too bad. I hope Bobby is spending his money wisely.

  2. Mets have been stupid, doing this over the years. But would you do this deal? Mets Pay Winning Bidder OF’s Checks

    • Absolutely. As I noted in an earlier reply, if you’ve put yourself in a position where you don’t need the money today, you can take great advantage of time and compound interest and take the money later. Clearly the bidder in this case didn’t need the $1.3 million for the next two decades and stands to make a nice $700,000 profit for doing nothing.

  3. He’s definitely having the last laugh! So interesting – thanks for sharing James! Have a great weekend!

    • Thanks, my friend. You do the same.

  4. Given how many sports stars blow thru their “lottery winnings”, this is clearly a much preferred structure! I’ve always dreamed that if I were to win the lottery (unlikely, given that I never buy a ticket), I’d chose the annuity option, every time!

    • Indeed. If you’ve put yourself in a position where you don’t need the money today, you can take great advantage of time and compound interest and take the money later. Deferred compensation can work out nicely.

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