RCAs for Professional Athletes: Your Financial Playbook After the Final Whistle

Xponents CPA
Aug 23
2 min read

When you’re on the ice, the field, or the court, the focus is always on performance. But every professional athlete knows the reality: careers are short, paydays are big, and the “game of money” can be just as tough as the sport itself. That’s where a Retirement Compensation Arrangement (RCA) comes in—it’s like having a playbook designed to keep you winning long after the final whistle.

What’s an RCA?

Think of an RCA as your financial training camp. Instead of putting all your earnings into regular retirement accounts with strict limits, an RCA lets you set aside much more of your income for the future. The money goes into a special trust, grows tax-deferred, and you only pay tax when you eventually take it out—often at a time when your tax rate is much lower.

For a deeper breakdown, check out our guide here: IPP and RCA: An Owner-Manager’s Guide to Advanced Corporate Pensions in Canada.

Why Athletes Are the Perfect Fit

Short careers, high paydays You might earn more in 10 years than most people do in a lifetime. The RCA helps you stretch those dollars far beyond your playing days.
Bigger contributions than RRSPs Unlike traditional retirement accounts, there’s no income cap holding you back. Your contract value drives your RCA room.
Flexibility when to cash out Whether you need income right after retirement or want to wait until later in life, the RCA gives you control.
Cross-border advantage Many athletes finish their careers or retire outside of Canada. With an RCA, withdrawals abroad can often mean lower taxes—sometimes just a flat 25% withholding, depending on where you live.

Leveling the Playing Field with U.S. Teams

We all know the challenge: U.S. teams in states with no income tax (like Florida or Texas) can offer more bang for the same contract. Canadian NHL teams, for example, face this head-on. RCAs are a way to bridge that gap, letting Canadian teams stay competitive in signing top talent.

A Real Case: Toronto Blue Jays Players

Former Blue Jays stars Josh Donaldson and Russell Martin went to bat with the CRA over how RCA contributions should reduce their taxable income. The court sided with the players, confirming that RCAs can provide real, defensible tax advantages for athletes earning across borders. You can read more about this landmark case here: Tax Court Hits a Home Run: A Game-Changing Ruling for Athletes in Canada.

Your RCA Benefits, At a Glance

Turn peak-earning years into long-term financial security
Defer tax until later, when your rate is likely lower
Keep your retirement flexible—withdraw when it makes sense for you
Gain a financial edge when negotiating contracts with Canadian teams
Protect your wealth and even pass benefits to your family

The Bottom Line

Your athletic career may last a decade. Your financial life? That’s the long game. An RCA is like having a seasoned coach drawing up plays for your money—helping you save on taxes today, secure income tomorrow, and stay ahead long after your playing career is over.

At Xponents CPA, we help athletes and their agents design RCA strategies that keep you winning financially. The game doesn’t end when you step off the field—it just changes. Make sure you’re ready.