By Anya Pelshaw on SwimSwam
Last March, it was announced that Ross Stevens, the founder and CEO of Stone Ridge Holdings Group, committed $100 million to the United States Olympic & Paralympic Committee (USOPC). The donation will allow Olympians and Paralympians to receive $200,000 for each Olympic or Paralympic Games that they compete in.
A recent Wall Street Journal article about the plan has brought renewed attention to people who either missed the news, or forgot about it, ahead of next month’s Winter Olympics, where the new $200,000 reward will go into effect.
The $200,000 is split into two payouts, $100,000 each. The first payout of $100,000 occurs 20 years after their qualifying games, of when they reach age 45, which ever is later. The second $100,000 payout comes in a form of life insurance that is given to the Olympian/Paralympian’s family or beneficiary that they choose.
The $200,000 is for each individual Games that the athlete participates in. If they make two Olympic/Paralympic Games, they get $400,000.
The first swimmer to receive the bonus? NCAA Champion Carsten Vissering, who made the US Olympic bobsled team.The money has been said to be restricted to athletes who make less than $1 million per year. This means that for example, NHL and NBA players that make more than $1 million will not receive the payments.
From a financial perspective, it is important to note that today’s value of $100,000 is not $100,000 in 20 years. Using the Federal Reserve’s 2% inflation target, a future value of $100,000 20 years from now is only $67,297 today. If the average inflation level is 3% over the next 20 years, that number falls to $55,000.
The $200,000 payment becomes more relevant in context of the Enhanced Games, where many athletes have cited the six-figure base salaries as part of their motivation for signing on. Across all sports, there are seven Americans signed on to the Enhanced Games. Most of those athletes are past their primes, and with the exception of Fred Kerley, most were unlikely to qualify for the next Olympic Games in 2028.
The bottom line is that these payments are beneficial but do not immediately inject $100,000 into the athlete’s banks today. The more immediate impact that the payments can have is that Olympians and Paralympians can now worry less about saving for retirement, i.e. if an athlete had been putting 15% into retirement, if they choose, they could lower that number today as they know they will have the $100,000 payout 20 years down the road (or at age 45).
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