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Yes that is correct, however their contracts are still tradeable if a team wants to take them on as they are coming off the books in their respective years.
The only exception to this is when a player is still under contract, wants to quit, and his team doesn't want to let him out of his contract. Under these circumstances the player can file for retirement with the league. The player is placed on the league's Voluntarily Retired list, forgoes his remaining salary, and cannot return to the league for one year. The latter requirement prevents players from using retirement as an underhanded way to change teams, but can be overridden with unanimous approval from all 30 teams.