Farmers don’t retire.
I could put quotes around that and attribute it to any of dozens of folks who routinely offer that up as a fundamental rule of farm life. But it’s not a basic law. It’s rare. But it is becoming less rare. It’s a flawed way of thinking. And you can change that.
We’ll start with why it’s becoming less rare for farmers to retire. We routinely talk to farmers who have retirement plans and see more stepping back from daily operations.
Call it retired or semi-retired, consultant, or board chair. The bottom line is that the older generations on farms aren’t the ones getting up at midnight because a neighbor called to report a cow’s out. And that retired generation isn’t overseeing employees daily. Nor are they taking meetings with seed reps.
My great-uncle retired, and he didn’t pass on the farm. The old dairyman just said he got tired of looking at a cow’s butt first thing in the morning and last thing before bed. He sold the cows and leased the pastures. A nonfarming son eventually bought the land.
As much as I adored Uncle Rex, you can do better. First, however, you have to pave a path to retirement. Here’s the simplified how:
Plan to retire. Open a 401(k), IRA or any sort of individual retirement account that puts your money to work for you. Make deposits. Do it today. It’s never too soon or too late to start.
Manage your taxes. Deferred income can impede the next generation’s financial opportunities.
Create a board of directors. Include your generation and the next. Add an adviser or two.
Transition leadership responsibility. You raised good people; now guide them to become strong leaders.
Put everything in writing. Plus, have it legally endorsed and countersigned. Paying for experts today will save your next generation time and money.
Here are the basics of why:
- The next generation won’t know how to lead if you die without ever teaching them — or let them learn by doing.
- You want the farm to continue into the next generation. Whether you’re the first generation or the 13th, nearly every farmer wants the operation to keep going after they’re gone.
- Shifting assets and leadership while you’re alive is cheaper — emotionally and financially.
- Staying on the board keeps you involved and lends your financial strength. It also gives the new leaders the fiscal health needed to expand versus forcing them to start over.
And here’s the really big why: Because this is what you dreamed of from the moment those children were born. Watching your kids lead the family farm is the pinnacle of parenting success.
Consider it your retirement gift. It’s infinitely more valuable than a gold watch.