Last Updated on January 15, 2024 by Ben

Nike Retirement

Nike is not only a manufacturer of shoes and clothing, but they also make a variety of gadgets and accessories for the sports lover. From high-tech running shoes to colorful headbands to digital watches, Nike offers Nike Retirement retirement for all their products. You may be able to choose a simple annuity retirement plan, or you may choose to customize a retirement package that suits your needs.

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The Beginners Guide to Nike’s Investment Plans

Should Nike be Part Of Your Retirement Income Portfolio? As you begin your retirement journey, there are several considerations you should be aware of when it comes to Nike. This is because Nike is a worldwide business, meaning that no matter where you live, you’re bound to find a Nike store or online outlet or Nike products that can be shipped to you.

First, Nike offers a variety of footwear for sports lovers. Nike offers high-tech running shoes, low-impact sneakers, and even shoes designed for snowboarding and skateboarding.

Second, Nike offers its consumers a range of T-shirts and other athletic clothing. From sweatshirts to running tights, Nike has a broad portfolio of clothing to choose from.

Third, Nike makes a variety of athletic headgear, including baseball caps, knit caps, and visors. And fourth, Nike makes a range of sports accessories, including backpacks, water bottles, watches, and more.

Now that you’ve familiarized yourself with the four major divisions of Nike, you can turn your attention to investing in Nike. Nike’s Dividend Powerhouse Nike has a long history of paying dividends to its investors, going back to the company’s inception in the late 1960s.

In fact, from 1969 to 1997, Nike’s dividend was a solid annual payout of at least $1.50 per share. Since then, however, Nike’s payout has been a bit lower.

Currently, Nike pays out a $1.10 per share dividend. This year, Nike’s board of directors voted unanimously to increase the dividend by 5 cents per share, and the increase will go into effect on January 1, 2018. Investors who choose to purchase Nike stock today will receive a healthy $1.10 per share in dividends as long as they hold their shares.

The 401(K) and Profit-Sharing Plan

An employee retirement plan, the Nike 401(K) plan provides a range of investment options for you, the participant. These options can be more extensive than what you may find with other plans, such as a traditional IRA. A 401(K) is particularly beneficial if you have a relatively high income and substantial investments.

If you are unsure whether a 401(K) is right for you or if you would prefer to invest on your own without your employer’s assistance, you may wish to review a variety of plans offered by Nike.

The Deferred Compensation Plan

Why Might You Use the Nike Deferred Compensation Plan?

If you are a highly paid executive in a position with a firm “non-compete” clause, the Nike deferred compensation plan may be right for you. Specifically, you may be able to defer a portion of your salary into your Nike accounts until you retire.

The deferred portion will not vest, and you can borrow against it, but you can take a lump sum when you retire. The range in deferral periods is from 10 to 40 years.

To be certified, you must have at least five years of service with the company. Your age will be a factor as well. You can start deferring compensation after five years of service with the company. If you reach age 59.5 before your Nike service period expires, 50% of your salary will be eligible for deferral.

Nike offers a wide variety of employment contracts that include a “non-compete” provision. These contracts typically set the number of years you must be with the company before you can take a retirement package from Nike.

The typical “non-compete” provision states that you cannot, during your employment with Nike, directly or indirectly, compete with Nike in any way, with or without compensation from Nike. This provision prohibits you from, for example, making shoes for Nike’s competitors. You can find a sample contract that includes a “non-compete” provision on Nike’s website.


The “non-compete” provision will protect you from your employer’s competitors, but it may not protect you from other risks. For example, if you default on your payments under the deferred compensation plan, your employer can demand you pay back your entire balance. Another risk is that your payments may be decreased or eliminated if terminated without cause.

The language of your contract with Nike will dictate the circumstances under which your payments may be decreased or eliminated. Another risk is that you may change jobs if your employer terminates you. In such a scenario, you may not be able to continue making payments to your Nike account.

The Long Term Incentive Plan (LTIP)

The LTIP enables you to make payments over time, with interest, in exchange for employment benefits. These benefits can include stock options, restricted stock, and restricted stock units. The LTIP was established in 1988. Like the other plans discussed in this report, all of the information in this section is based on Nike’s prospectus (the prospectus includes both the information in this section and the next section). If you decide to invest in Nike’s stock through the LTIP, you should review the prospectus carefully to get a sense of the plan’s terms.

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Is Owning Nike Stock in Your Nike 401(K) A Good Idea?

Nike Stock Options

An option is the right to buy shares of a company’s stock at a predetermined price. Normally, a stock option gives you the right to purchase stock at a very low price, and the price is called the “exercise price.”

If the stock is worth more than the exercise price when you exercise your option, you can receive a profit in the form of an “option premium.” You pay the exercise price for the shares when you exercise an option, and the “strike price” is when the options were originally granted to you. Options, in general, are a good way to hedge your exposure to the stock market.

Like stocks, the price of options goes up and down, which means that buying and holding options can create gains and losses over time. Options are only one way to invest in Nike, and the other way is to buy the company’s stock directly.

Why the Limitations on Nike Stock Fund within the RSP 401(K)?

Unlike the RSP-defined contribution plan, the RSP-defined contribution plan does not offer the ability to invest directly in stock. This is because of the significant risks associated with such investment. Investing in stock is not appropriate for everyone. And even if you are comfortable taking such risks, you may have other financial goals you wish to preserve through diversification.

The Nike Plan Rules and Limitations

Like any other investment, you should read the prospectus that Nike sends you carefully if you decide to invest in their stock through the LTIP. This document should provide a detailed description of the plan, its risks and rewards, and how it is administered. You can find a sample contract that includes a “non-compete” provision on Nike’s website.

The Employee Stock Purchase Plan (ESPP)

The ESPP enables you to purchase the company’s stock without the significant risks associated with direct investment. As a participant in the ESPP, you pay no fees to invest. Your contributions are made out of the profits that the company generates. This structure, however, imposes significant restrictions on you as a participant. Your contributions are locked up. If the company fails to generate profits, then you receive no payouts.

You are not allowed to sell your shares in the company unless you first terminate your employment with the company. And if the company does generate profits, then the plan pays dividends, and shares repurchase out of these profits. There are no minimum distribution requirements.

The ESPP is set up to payout in the form of company stock. If you want to sell your stock shares, you must first terminate your employment with the company, and you would need to be compensated for the shares you sold in a lump sum.

The company’s stock may be underpriced or overpriced relative to other publicly-traded companies. You can be able to sell your shares at an attractive price, but it’s not guaranteed.

Understanding the Risks

As with any investment, there are risks to investing in company stock. One main risk is that the stock price will decrease, and the risk may cause you to receive a capital loss, a loss of money. You may also encounter so-called “tax inversion” risks. This is when a U.S. company takes steps to move its headquarters to a country with lower tax rates to reduce its tax burden. Tax inversion would result in a U.S. company paying dividends or distributing profits to shareholders but having no legal existence.

The U.S. government could then argue that these dividends and profits should be taxed. You also face the risk that you may not be able to liquidate your investment when you choose to do so. This risk is due to the illiquid nature of most corporate shares.

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Final Thoughts – Nike Retirement

Nike has announced that it will be providing employees with a profit-sharing plan to help them prepare for retirement. This new program is called Nike Retirement and includes many different benefits. They include employer-matched savings accounts, earnings vesting schedules based on how long you’ve been working there, and the ability to cash out your entire balance at any time.

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