MLS

Player's Benefit

Based on your information, you could immediately save $860,642 in taxes during your MLS career by participating in the plan. While taxes will eventually need to be paid, you can reduce your average income tax rate by 1.24% and spread the tax bill over time into your post-playing career.

Beyond the tax savings benefit, you could grow your initial deferred compensation by $1,744,288 through compounded investment earnings at 7.2%.

	No Deferred Compensation Strategy	Utilizing Deferred Compensation
Marginal Tax Rate	37%	35% - 37%
Total Taxes Paid During Career	$3,029,875	$2,169,233
Average Tax Rate	32.23%	30.34%

	Total Amount Deferred	Total Amount Returned
Return on Assets	$2,400,000	$4,144,288

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Tax Summary

Assuming no deferred compensation strategy, current federal tax rates, and your marital status, your annual estimated taxable income is $926,150.
With an average tax rate of 32.23%, you will be paying $214,188 - $325,188 in taxes every year or $3,029,875 in total.
During this period, every additional dollar that you earn through outside income sources (ex: Business Income, Endorsements, Etc.) will be taxed at a rate of 37% . This is known as your marginal tax rate.

Deferred Compensation Summary

By deferring your average annual after-tax income will drop to $483,077.
However, by deferring this compensation, you will see your average tax rate drop to 30.99% during your years in the league.
Assuming a 7.2% annual growth rate on your investment assets, the compensation that you defer into retirement will be taxed at an average rate of 29.56%.
Throughout your career, your marginal tax rate will be 35% - 37% and during retirement it will be 35% - 37% . Hint: increasing your deferral length will lower this even more.

Return on Investment

During your years in the league, if you defer you will have a total of $2,400,000 deferred for your retirement.
While continuing your career, however, these assets will be invested and start generating returns. By the time you retire, the total income that you deferred is estimated to increase to a pre-tax amount of $4,234,742, assuming an annual growth rate of 7.2%.
In retirement, this income will be taxed at a much lower rate, and continue to be invested leading to an after-tax total of $4,144,288 paid out to you over the course of 10 years.

Archford Capital Strategies, LLC (“Archford”) is a Registered Investment Advisor, registered with the U.S. Securities and Exchange Commission (“SEC”). Registration as an investment advisor does not imply a certain level of skill or training. The information presented has been prepared on the basis of publicly available information, internally developed data or other third-party sources. There is no guarantee as to the accuracy, completeness, or reasonableness of the contents contained herein and does not constitute an official account statement. Archford Capital Strategies, LLC and its affiliates do not provide legal advice. Tax and accounting services are offered through Archford Accounting, LLC, an affiliated entity of Archford Capital Strategies. Archford Accounting, LLC must be formally engaged for tax or accounting advice.

This application performs a compounded interest calculation based on the inputs that the user enters for salary, deferral period, investment style, and deferral payout length. Final values factors in the previously listed inputs, as well as current year tax rates and the user's marital status. Results on this application will vary only if an input is adjusted, as there is no variability or simulation in the calculation itself.

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.

Investing involves risk, including the possible loss of principal and returns. There are no guarantees that investment objectives will be met. Returns presented in this document contains hypothetical performance data, which have inherent limitations. Actual future results may not align with the hypothetical results presented herein. Actual account performance may be higher or lower. No representation is being made that any account will achieve profits or losses similar to those shown. There may be material differences between hypothetical performance results and the actual results subsequently achieved.