Happy Bobby Bonilla Day 2026!
The happiest annuity day of the year!
From last year (and sponsored by an annuity company… more on that in a bit):
In 2026, he has less than 10 years on that annuity — it’s not a life annuity, but what is called an annuity-certain — but it still makes me happy.
In 2018, I made my own short video:
Another video:
It’s the happiest day of the year for me, a life-annuity actuary.
As I wrote once, the story of Bobby Bonilla’s deal, when everything appropriate is included, it has:
annuities
Bernie Madoff
too-high discount rates in valuation
less-than-optimal behavior in trying to avoid a “tax”
credit risk
deferred wages
principal-agent alignment (YAY!)
And so far, it’s worked out for Bobby Bonilla, so good for him!
Here are some non-video links:
23 Jan 2026, USA Today, Bob Nightengale: Godfather of deferred MLB contracts? How Bobby Bonilla’s infamous deal paved the way
Bonilla, 62, the six-time All-Star and World Series champion who once was the game’s highest-paid player, wasn’t the first player to receive a deferred contract – but none are more famous.
He has become known as the godfather of deferrals, with Bonilla and former agent Dennis Gilbert orchestrating an ingenious deal a quarter-century ago with New York Mets that has become a trend-setter.
Everywhere you turn these days, players and teams are negotiating contracts with massive deferrals.
Shohei Ohtani took it to a new level two years ago when he signed a 10-year, $700 million contract with the Los Angeles Dodgers, deferring a stunning $68 million a year without interest. The contract is reduced to $460 million in present-day value, saving the Dodgers $24 million a year in luxury taxes. And for Ohtani, it’s a savings of about $98 million, avoiding California taxes on the $68 million annual payments if he’s no longer a California resident in 10 years.
…..
While players have now embraced deferrals, there’s an enormous difference between today’s deferrals and Bonilla’s deal from 2025. Bonilla was paid 8% interest on his $5.9 million buyout, paying him $1.19 million annually for 25 years through 2035. Bonilla, with the guidance of his former agent, turned $5.9 million into nearly $30 million.
The contract now has become legendary, with July 1 now being called “Bobby Bonilla Day’’ in baseball, the day he receives his annual check.
“It’s a beautiful thing,” Bonilla tells USA TODAY Sports. “It gets so much publicity now, it’s become bigger than my birthday.”
11 May 2026, Brobible: Bobby Bonilla On Being ‘Celebrated’ Each Year On July 1: ‘Better Than My Birthday’
This year will mark the 15th of the 25 payments the Mets will pay him before the contract finally comes to end. Bonilla last played in Major League Baseball in 2001. He also last played for the Mets in 1999, but the contract (which was sold at auction for $180,000 in 2023) that is still paying him was actually signed in 1991.
“It’s a beautiful thing,” Bobby Bonilla told Sportico this week while discussing the Los Angeles Dodgers’ many deferred contracts. “It’s a reminder that I did the right thing by putting the money away.”
….
He added that he “wasn’t that much of a big spender” when he played. He just wanted to make sure he had money put away for when his playing days were over. “I never needed five of the same car or 17 houses. I never overdid anything,” he said.
29 Jun 2026, Davy Insights: Bobby Bonilla day
In 2000, Bonilla was past his prime, but under his contract, the Mets still owed him just under $6m for the final year of his contract. Keen to redeploy resources toward a competitive roster, the Mets opted not to pay him immediately. Instead, they agreed to defer the payment — spreading it out over future years with interest.
Bonilla agreed that instead of $6m immediately, he would accept deferred instalments over twenty-five years of $1.19m, starting July 1st 2011.
July 1st is now known as Bobby Bonilla Day. It rankles with Mets fans. Bonilla retired a quarter of a century ago — and the Mets still owe him ten more million-dollar-plus paydays. The total payout under the deal will be just shy of $30m.
Before reading on – do you think the Mets were crazy to strike this deal with Bonilla?
The Planet Money podcast did a deep dive on how the Mets found themselves paying someone almost $30 million to not play baseball. In short, it’s a bit of a shrug. It wasn’t shockingly favourable to either party.
The $6 million with 8% annual compound interest, grows into exactly the amount of money the Mets owe Bobby Bonilla. At the time the deal was struck interest rates in the US were 6%, so 8% wouldn’t have raised too many eyebrows.
That is correct. However, 8% GUARANTEED FOR 35 YEARS is a pretty big deal.
It was a really valuable guarantee… kind of like how public pensions had behaved as if they could achieve said returns (“guaranteed”) indefinitely… and they’ve not…. and it’s caused all sorts of problems.
But let me not rain on Bobby Bonilla’s parade, because it’s a happy story for him, even if it’s not a happy story for the Mets, or for others who were found to have been found wrong in thinking they found a “sure thing” of “guaranteed” 12% returns!
….with Bernie Madoff.
Which is why they thought locking in 8% for 35 years was no big deal.
Thinking about annuities is hard
Hey, we actuaries have a few exams about them, and the pass rates aren’t great.
But let’s see what the research says:
22 June 2026, Think Advisor, Allison Bell: Choosing Annuities Is Hard, Even for Well-Informed People, Researcher Says
Retirement savers who understand what annuities are and how annuities work may not be much more likely to buy annuities than anyone else.
“Rather, financial and longevity literacy are likely to help individuals do a better job of determining whether additional annuitization is appropriate for them,” Jeffrey R. Brown, a longtime retirement savings researcher, wrote in a new working paper about the impact of financial literacy on consumers’ annuity purchasing decisions.
A working paper is an academic paper that has not yet gone through a full peer review process.
Brown — a professor of finance at the University of Illinois Urbana-Champaign business school and a member of the TIAA board of trustees — wrote the paper to analyze what existing studies show about the relationship between financial literacy and annuity use.
Economists have studied that relationship often, because they think that U.S. retiree use of annuities is surprisingly low, given what models show about how annuities can help people maximize resources in retirement.
Brown found evidence that a factor other than lack of financial literacy may contribute to low annuity use: lack of longevity literacy.
You can read the rest of the Think Advisor article here.
I’ve done a video on longevity risk/variability somewhat here:
Planning for Retirement:
One person
Two people
There’s another aspect of this planning people really don’t want to think about: the increasing inability to manage one’s finances as one ages.
One of the reasons people don’t annuitize, I believe, is that they see themselves as losing control of the money that is annuitized.
However, there is an illusion of control in the first place… pay attention to how this famous monologue from Shakespeare ends:
This “seven ages of man” speech from Shakespeare’s As You Like It ends:
….Last scene of all,
That ends this strange eventful history,
Is second childishness and mere oblivion;
Sans teeth, sans eyes, sans taste, sans everything.
That “second childishness” is referring to senility, of course, as people loose their physical and mental faculties.
While there have been improvements in treatments for dementia, there is increased incidence of dementia with age (and often females have higher incidence than males, but they both have increasing incidence with age). We all hope that there is improvement on this score.
The issue, though, is if there is not some kind of automatic and guaranteed income-creating feature of retirement assets, it can become harrowing as one reaches extreme ages. There are a variety of “longevity products” (which I will not detail — that’s my day job. Those people pay me rather a bit.) There’s more than just old-school life annuities these days.
But it is a concern that while one generall doesn’t have a problem dealing with money early in retirement, say late 60s or early 70s, when one gets into late 70s or 80s, cognitive abilities to deal with money becomes iffier.
Whether one likes the Consumer Financial Protection Bureau or not, they have a page on this issue: Planning for diminished capacity and illness
To avoid fraud and financial abuse, consider planning ahead for your financial future or helping a loved one who is starting to lose the ability to manage their money or property.
“Diminished financial capacity” is a term used to describe a decline in a person’s ability to manage money and financial assets to serve his or her best interests, including the inability to understand the consequences of investment decisions.
While the inability to manage one’s money is clearly a problem in itself, when people of any age lose the capability to manage their finances, they may also become more vulnerable to investment fraud and other forms of financial abuse.
Having an income annuity does not necessarily prevent financial abuse as a senior, as the cash produced can be diverted. But it does prevent people from playing around with investments (sometimes).
Having a simpler financial set-up does help others manage your money for you.
Prior Bobby Bonilla Day posts
Jul 2025: Happy Bobby Bonilla Day 2025!
2024: Podcast episode: Happy Bobby Bonilla Day 2024!
2021: Happy Bobby Bonilla Day! In Praise of Valuable Annuities
2020: Classic STUMP: Happy Bobby Bonilla Day! And Independence Day! Make Mine a Valuable Annuity!
2018: Mornings with Meep: Happy Bobby Bonilla (and Bruce Sutter) Day!
Plus some extra Ohtani action:
Jul 2024: Taxing Tuesday: A Bobby Bonilla Hangover
