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Monday, April 21, 2008

Retirement?  Now?  Really, I Never Gave It A Thought.  But, Hmmm?



 

Michael Jordan retired at the top of his game. A good friend in his 50’s also says it may be that time. More revenue has been earned than ever before. All debts have been repaid. Land values are quite high. Some farmers may think the fun is just starting. Others may think this is a good time to hang it up before something goes terribly wrong. If you are in that latter category, transition planning is your next step.

Always looking out for the Cornbelt farmer, the farm gate blog fell into a wealth of material about farm organizational planning, farm business development resources, and farm transition planning all neatly packaged by the Ohio State Ag Manager. Let’s focus on the issue at hand, and that is to think about the questions that need answers if you are at the departure gate waiting for the next flight to retirement.

If your retirement shifts the operational responsibilities to the next generation, then you probably need to have a family meeting. But what does that entail? It is not to discuss seed, machinery, or the next family picnic, but to determine long term plans for operation and management of the business. “Son, your mother and I plan to retire at the end of the year, and I know this will come as no surprise to you since we have discussed this timetable twice a year for the past 5 years.” With that regular item on the agenda, there should be few unanswered questions. Family meetings need to be honest, open, and involving everyone so even youngsters can see how strong the family business is planned.

Estate planning is one of those things that is difficult to start, but never too late to start. On the other hand, it is never too early to start, and can become a typical conversation element once everyone is comfortable discussing “the inevitable.” Estate planning is different for every family, but the main elements are the same for all, and they include wills, life insurance, disposal of property, and even such significant matters as nursing home expense, and possibly trusts.

If retirement is looming, and you are uncertain about your readiness, a retirement estimator for farm families will help gauge expenses and your overall preparedness. Of course, in retirement your needs in certain areas may be less (work clothes, tools, equipment), but your needs may be more (medical costs) after retirement. Farm families which may be far from retirement should always begin planning for that day, such as saving more for retirement. Planning guides are always helpful.

Summary:
Retirement is a big step in life, and can either be as fun or traumatic as going to first grade. But it is a step that requires a significant amount of homework, and probably the type of homework that involves a committee of your family, and those who will be taking over the farming operation. Current economic factors in agriculture can either push farmers into planning to stay in farming longer, or transitioning out faster than they once thought. However, retirement planning is necessary, regardless of your current age, family situation, financial affairs, or lifelong intentions.

Posted by Stu Ellis on 04/21 at 01:27 AM | Permalink

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