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Rutgers Cooperative Extension Later Life Farming Online Course
Barbara O’Neill, Robin Brumfield, Stephen J. Komar, and Robert Mickel
Rutgers Cooperative Extension
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• Course URL: http://laterlifefarming.rutgers.edu/
• 10 modules related to retirement planning for farm households.
• Topics are areas of concern indicated by two focus groups of farmers:
– Above age 50
– Currently farming in New Jersey
– Conducted in the Summer of 2008.
Project Overview
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Farm Household Demographics• Average age of farm operators: 57.1
• 20% increase in age 75+ farmers from 2002 to 2007
• Farmers work longer than people in many other occupations (work and home are intertwined)
• Most common farm types:
– Residential/lifestyle farms (36%)
– Retirement farms (21%)
• Much of farm households’ wealth is illiquid
• Great diversity in farm household incomes
– See http://www.ers.usda.gov/Publications/EIB67/EIB67.pdf
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• Perceptions about retirement
• Retirement role models
• Future plans to farm
• Planned sources of retirement income
• Questions about retirement planning and investing
• Greatest financial hope
• Greatest financial fear
• Impact of regulation on land values/retirement plans
Focus Group Question Topics
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• Most will farm at least part-time in retirement
• Most had positive retirement role models
• When no heirs are interested in farming, the farm’s future is uncertain
• Most had some type of retirement account such as an IRA (often through a spouse)
• Fear of government regulation, high medical expenses, family feuds, and losing the farm
• Unique set of retirement challenges (e.g., farm transition)
Major Findings
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Several FG participants avoided tax-deferred savings plans for the self-employed because of
Future income uncertainty
A desire to avoid administrative paperwork,
The legal requirement to fund employees’ accounts if they make plan contributions for themselves.
Concerns About Retirement Plans for the Self-Employed
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• Few financial planners have expertise in farm financial management.
• Previous sale of development rights to generate positive cash flow now limits options.
• A smooth and equitable transfer of the farm concerns families with farming and non-farming heirs.
• Legal restrictions and regulatory impacts on development and land values.
Farmers’ Concerns Regarding Retirement
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• http://laterlifefarming.rutgers.edu/
• Many farmers plan to work past traditional retirement age AND need to convert land and other farm assets into a liquid stream of income.
• We used original material AND links to resources such as Who Will Get Grandpa’s Farm? Communicating About Farm Transfer and the Retirement Estimator for Farm Families (Purdue University)
Later Life Farming: Creating a Retirement Paycheck
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Dr. Barbara ODr. Barbara O’’NeillNeillRutgers UniversityRutgers [email protected]@aesop.rutgers.edu
Later Life FarmingLater Life Farming Web site address:Web site address: http://http://laterlifefarming.rutgers.edulaterlifefarming.rutgers.edu/ /
Questions? Comments?