Quitting Farming Is Complex and Always Unplanned – Center for Retirement Research

The decision to retire is difficult enough. But throw the family farm into trouble and it presents a host of problems that most people don’t think about.

How long will the farmer be able to do this work? Are there any older children who are willing to undergo surgery, and which one? Will the farm continue to make a profit, and can it be sold to another farmer or agribusiness? And these decisions are not easy for older farmers who have shed blood, sweat and tears on the land for decades.

A survey created to explore their unique concerns takes the first step in understanding the resources available to help farmers design their unusually complex retirement plans. Another finding concerns other small business owners who also face succession problems.

The average age of the farmers in the survey – mostly men and all from Wisconsin – is 63 years old. But retirement is not top of mind for many of them.

More than two-thirds said they did not know when they would retire. Among those considering age, he is 69, a few years older than the normal retirement age.

Less than half of farmers say they have a solid plan to transfer the farm when they no longer work. And one in four have started working on their plans.

The good news is that the majority of survey respondents use professional services such as financial advisors, lawyers and accountants. However, 14 percent may be doing more: they don’t use these external services at all, or they hire a single specialist, which may not be enough for their complex situations.

Farmers, however, rely on qualifying for some form of federal retirement or health benefits in retirement. Most have considered getting Social Security, Medicare, or Medicaid, the federal government’s health insurance program for low-income workers and retirees.

“Many farmers use more than one resource to plan money” and “look for relevance [government] systems ‘at least partially’ when making financial decisions,” the researchers concluded.

But in another indication that they may be doing more, seven out of ten farmers have never contacted the US Department of Social Security about their retirement benefits. Farm owners, who the government considers self-employed, contribute to Social Security. But only about a third of them were familiar with the MySocialSecurity website that the government set up to provide individual workers with an estimate of their future retirement benefits based on their income history.

Wisconsin farmers also seem wary of using the Internet to help plan for retirement. Only about one in four use Internet services in their programs. Spotty internet access in some rural areas may be a factor in their reluctance to go online.

Social Security encourages employees to get their benefit information on the agency’s website. But farmers say they still prefer to be called by someone at the center. Most of them are also within a 30-minute drive of a Social Security office.

The study is just the beginning of understanding farmers’ retirement planning challenges, and more work is needed, the researchers say.

Reading this learn by J. Michael Collins and Marissa Eckrote-Nordland, see “Social Security, Retirement and Farmers – A Survey of Wisconsin Farm Owners.”

The research reported here was conducted in accordance with a grant from the US Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium. The views and conclusions expressed are solely those of the authors and do not necessarily represent the views or policy 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, or assumes any legal responsibility or liability for the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any particular commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not imply endorsement, recommendation or favor by the United States Government or any agency thereof.