The decision to retire is complex enough. But adding family farms into the mix brings up a host of issues that most people never consider.
How long will the farmer be physically able to complete the work? Are there any adult children willing to take over the surgery, and which one? Can the farm continue to be profitable, and can it be sold to other farmers or agribusinesses? These decisions are not easy for older farmers who have shed blood, sweat and tears on this land for decades.
A survey designed to explore farmers’ unique concerns is the first attempt to understand the resources available to help farmers create incredibly complex retirement plans. Some of the findings are relevant to other small business owners who are also facing succession issues.
The average age of the farmers who participated in the survey (mostly male, all from Wisconsin) was 63 years old.
More than two-thirds said they haven’t figured out when to retire. Of those who did age, it was 69, a few years older than the typical retirement age.
Less than half of farmers said they had a clear plan to abandon their farms when they no longer had jobs. A quarter are just starting to implement their plans.
The good news is that most respondents do use professional services such as financial advisors, lawyers and accountants. However, 14% could do more: They don’t use these outside resources at all, or they hire just one professional, which may not be enough for their complex situation.
However, farmers count on qualifying for some type of federal pension or health benefits when they retire. Most people consider enrolling in Social Security, Medicare, and/or Medicaid, the federal government’s health insurance program for low-income workers and retirees.
“Most farmers use more than one resource for financial planning” and are “considering eligibility for financial assistance” [government] “at least a little bit” when making financial decisions,” the researchers concluded.
But in another sign they can do more, seven in 10 farmers have yet to contact the Social Security Administration about retirement benefits. Farmers are considered self-employed by the government and they contribute to social security. But only about a third are familiar with the government-run MySocialSecurity website, which provides individuals with estimates of future retirement benefits based on their earnings history.
Wisconsin farmers also appear wary of using the Internet to help plan for retirement. Only about a quarter use online resources in planning. Unstable network access in some rural areas may be a factor that prevents them from accessing the Internet.
Social Security is increasingly encouraging workers to get benefit information on the agency’s website. But farmers said they still prefer to have a phone call with someone from the agency. Most are within a 30-minute drive of a Social Security office.
Researchers say the survey is just the beginning of understanding the huge retirement planning challenges farmers face and more needs to be done.
To read this study By J. Michael Collins and Marissa Eckrote-Nordland, see “Social Security, Retirement, and Farmers—A Survey of Wisconsin Farmers.”
The research reported in this article was conducted under a grant from the U.S. Social Security Administration (SSA) as part of the Retirement and Disability Research Consortium. The views and conclusions expressed are those of the authors and do not necessarily represent the views or policies of SSA or any agency of the federal government. Neither the United States Government, nor any of its agencies, nor any of its employees makes any warranty, express or implied, and assumes no legal responsibility or liability as to the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any specific commercial product, process, or service, whether by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation, or support of the U.S. Government or any agency thereof.
