The First Steps of Retirement

Prepare now so you’ll have options later.

It’s said that farming is a life, not a career. So to farmers, the idea of retiring may seem unimaginable. In fact, more than 25% of farmers and about 50% of farm landlords are over 65, compared with just 3% of the overall U.S. workforce.[1]

Advances in health and longevity are enabling people to stay active longer, but it’s important to think ahead to a time when you’ll scale back from full-time work — whether that means full retirement or just handing off more of the work to a new generation. Considering the financial side of retirement right now will likely give you more choices later.

Broaden your income sources

A key question for any retiree, of course, is where the money for daily living will come from. Social Security accounts for just 13% of income for retirement-aged farmers, according to Internal Revenue Service statistics cited by the U.S. Department of Agriculture (USDA).[2]
While much depends on the size and nature of the farm, other important sources can include pensions and retirement accounts (21%), interest and dividends (19%), and capital gains (13%).

You also may want to consider taking a part-time retirement job away from the stress and physical demands of the farm. In fact, retirement-age farmers receive 12% of their income from non-farm wages and salaries, double what they receive in farm income.

Ramp up your savings

Farmers tend to have a much higher percentage of their overall wealth in business equity than do other Americans (54% versus 17%), according to the USDA.[3] While that gives them a higher net worth on paper than other Americans, the source of that business equity — their land — is something many farmers want to keep in the family.

That increases the need to steadily save through other means, such as tax-advantaged savings plans. Consider contributing the maximum allowable amount to a Simplified Employee Pension Plan (SEP), 401(k) or IRA. To help people prepare for retirement, savers 50 and older may contribute additional amounts beyond the limits for younger investors.

Envision your retirement life

Beyond finances, it’s important to think about what you want to do in retirement. Considering how much of your life is tied up in where you are and what you do, that may not be easy for most farmers.[4] Take the time to sit down and consider whether your ideal retirement involves travel, spending time with family, volunteering or, well, farming. Whatever you’ll find most fulfilling, having an idea early on may help you work toward and achieve that goal.

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Important Legal Disclosures and Information


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  3. ibid


The article(s) you are reading were prepared for general information purposes by Manifest, LLC. These articles are for general information purposes only and are not intended to provide legal, tax, accounting or financial advice. PNC urges its customers to do independent research and to consult with financial and legal professionals before making any financial decisions. These articles may provide reference to Internet sites as a convenience to our readers. While PNC endeavors to provide resources that are reputable and safe, we cannot be held responsible for the information, products, or services obtained on such sites and will not be liable for any damages arising from your access to such sites. The content, accuracy, opinions expressed, and links provided by these resources are not investigated, verified, monitored or endorsed by PNC.