EP Wealth’s Adam Fein and Joseph Palumbo share how NIL college athletes can manage short-term income responsibly while laying the foundation for long-term planning. 

How to Integrate NIL Income into a Long-Term Financial Plan

The introduction of NIL (Name Image Likeness) and pay-to-play opportunities has created new financial realities for college athletes. These deals typically last one year at a time and can fluctuate from season to season. Income may change based on factors outside the athlete’s control, such as coaching switches, injuries, playing time, or new transfers joining the roster. How much a player earns is tied to on-field performance from year to year, which is never guaranteed. Whether they will ultimately go pro is also unknown.

With so many uncertainties, financial planning at this stage cannot extend too far into the future. The priority is helping athletes manage their money responsibly while laying a foundation for what comes next.

We have spent decades as financial advisors to pro athletes in the NFL, NBA, and other sports, and we bring that same experience and perspective to our work with NIL clients. Most college players will not go on to play professionally, and for them, NIL income represents a valuable financial head start that can help launch their next endeavor in life. For those who do turn pro and begin earning a more predictable salary as W-2 employees, we can begin to consider a broader set of investment and wealth management strategies that take the long-term financial picture into account.

Long-Term Relationship Building

While our work with NIL athletes often starts with immediate needs like budgeting, forming an LLC, and tax preparation, our ultimate goal is building relationships that last.

We act as fiduciaries, which means our responsibility is to put the client’s interests first. We avoid products and fees that are unnecessary or that could limit access to funds when income is unpredictable. The guidance we provide is designed to be clear, practical, and aligned with what the athlete needs right now, with room to adjust as circumstances change.

Strong relationships also include the right people in the room. We encourage athletes to involve trusted family members or mentors from the start of the process, so decisions are grounded in shared priorities and accountability.

We also help clients assemble a broader support team. Through our networks, we connect clients with CPAs, attorneys, and other specialists who understand the unique challenges of NIL. By working together as a team, everyone stays aligned on the athlete’s goals, and the advice they receive is reinforced from multiple directions.

This long-term approach allows us to be more than just advisors for a season or two. It positions us to adjust plans as a client’s career and financial life evolves, whether they continue into professional sports or transition to life beyond athletics.

We Keep Financial Planning Simple for NIL College Athletes

For many NIL athletes, this is the first time they are managing significant amounts of money. Some kids coming out of high school may not even have a bank account when they first work with us. Trying to introduce complex strategies too early can be overwhelming and counterproductive. That’s why we keep the process straightforward and focused on the essentials:

• Budgeting: Helping clients understand how much to spend now versus what to set aside.
• Tax planning: Focusing on tracking expenses and preparing for next year’s tax obligations. If income levels warrant, we may consider tax-advantaged strategies like a SEP IRA or 401(k) while maintaining flexibility.
• Entity structure: Establishing an entity such as an LLC (or an S-Corp, if appropriate) is an important step for NIL athletes because they are essentially running their own small business. Endorsement deals and appearance fees are typically paid as 1099 income, which means taxes are not withheld and the athlete is responsible for reporting everything accurately. An entity provides a clear framework for separating business and personal finances, tracking expenses, and preparing for tax filings. Depending on income levels, it can also create opportunities for tax savings and liability protection.
• Family support strategies: If family members are helping with responsibilities like scheduling, training support, or handling appearances, we may look at formal arrangements such as putting them on the payroll or designating them as 1099 contractors.
• Financial education: Building good financial habits early, from recordkeeping to understanding basic investment concepts.
• Guidance on major decisions: We work through real-life questions with our clients, whether it’s evaluating a potential real estate purchase, understanding the income tax implications of transferring to a college in a different state, or deciding how to handle large one-time payments. Our role is to provide clear, practical advice before commitments are made.

Common Mistakes in NIL Income Management

Without a strong financial plan in place, it’s easy for NIL athletes to run into problems. Some of the most common missteps we see include:

• Spending too much, too soon, without setting aside money for taxes.
• Not having a plan at all, which makes it hard to track progress or anticipate obligations.
• Following the wrong plan, such as locking money into illiquid investments, buying property prematurely, or being pressured into products that are not right for their situation.
• Taking advice from social media or well-meaning acquaintances who may not fully understand NIL-specific dynamics.

Financial Strategies for NIL Athletes

Here is what a good NIL financial plan typically includes:

• Establishing an appropriate entity structure (LLC vs. S-Corp) based on income level.
• Working with a qualified CPA for tax planning.
• Implementing payroll if using an S-Corp election.
• Tracking business expenses carefully, including training camps, travel, or equipment.
• Evaluating NIL deals and potential transfers with tax implications in mind.
• Maintaining a conservative investment approach with an emphasis on keeping funds available.

Our Financial Planning Process for NIL College Athletes

Estimating Income and Entity Structure

A first step often includes estimating annual earnings and introducing the client to a CPA in our network. The CPA can help determine whether an LLC or S-Corp election is appropriate. For athletes earning above a certain threshold, an S-Corp may provide payroll tax savings, but each case is evaluated individually.

Setting Aside for Taxes and Living Expenses

Once income estimates are in place, we emphasize setting aside the correct amount for taxes and then determining a reasonable spending budget. Because many college expenses, such as housing, food, and transportation, are already covered by the university, day-to-day costs may be lower than they will be for a professional athlete. That creates opportunities for disciplined saving.

Following a Simple “Bucket Strategy”

To keep the process straightforward, we often start with a three-bucket system:

1. Money set aside for taxes
2. Money set aside for living expenses
3. Excess savings placed in a money market fund

With current yields above 4%, money market accounts allow funds to grow modestly while staying liquid and accessible. We prefer this cautious approach over locking funds into illiquid investments that could leave an athlete without resources if their circumstances change unexpectedly. There will be plenty of time to build investment portfolios in the future, so there is no reason to make rushed decisions based on fear of missing out on market returns.

Tracking Expenses and Building Habits

We encourage clients to keep detailed records throughout the year. At tax time, their CPA will need documentation of training camps, equipment, travel, or other business-related costs. Tracking expenses consistently also helps athletes develop financial discipline and awareness of where their money is going.

Considering Additional Strategies Over Time

If savings build consistently and an athlete has shown discipline in following their plan, we may explore further strategies such as a SEP IRA or 401(k). These options are typically considered in consultation with a CPA and only if they fit with the athlete’s cash flow needs.

Transition to Professional Athlete Status

If a client shifts from NIL earnings to a professional career, the planning approach shifts as well. Instead of operating as a small business owner, they become W-2 employees with more predictable paychecks. That stability allows us to broaden the planning conversation and potentially introduce new strategies:

• Deeper education on investments and asset allocation.
• Comprehensive financial planning with “what-if” scenario modeling.
• Exploring real estate
• Introducing estate planning and asset protection strategies.
• Considering alternative investments as income and wealth grow.

Portfolio Selection and “What-If” Scenarios

At this stage, we walk through several of our model portfolios with the athlete, discussing which mix of stocks and bonds fits their time horizon, tolerance for volatility, and overall goals. Because of their age, portfolios are usually stock-heavy — often in the range of 80% stocks and 20% bonds — but we look at different scenarios together.

We also run “what-if” models to show how different decisions may play out over time. This could include comparing a conservative versus an aggressive investment approach or evaluating lifestyle choices such as buying a $2 million home versus a $3 million home. These exercises help the athlete see how today’s choices may shape their financial picture years down the line.

Real Estate Considerations

When it comes to real estate, we encourage clients to think carefully about where they want to live long-term rather than buying property in the city where they happen to be playing. A professional career may involve frequent team changes, and purchasing homes in each new market can quickly become inefficient and costly. Focusing on a long-term residence market provides stability and a clearer foundation for future planning.

Estate Planning and Asset Protection

Estate planning and asset protection also become critical as wealth grows. This includes establishing or updating wills, setting up trusts, reviewing insurance coverage, and creating structures that protect assets from potential risks. These steps help safeguard what athletes have worked so hard to get and provide clarity for how those assets may be used or transferred in the future.

Building a Long-Term Framework

By layering in these strategies as a career develops, we help professional athletes move beyond the short-term concerns of NIL income and begin building a financial framework designed to support them for decades to come.

From College Earnings to Future Planning

NIL income is unpredictable, but it can create meaningful opportunities. By starting with the basics, building a support team, and being aware of common pitfalls, athletes can use these years to establish habits that serve them for life. Whether a client continues into professional sports or transitions to a different career, our focus is the same: building relationships and creating adaptable financial strategies that support them today and into the future.

EP Wealth is here to help. Explore our wealth management services for athletes, and we can create a financial strategy to support both your career and your future.

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