Arkansas agriculture isn’t just a profession; it's also a way of life. Many farmers inherit land that’s been in their families for generations. While retirement can be a big and difficult decision, it’s often one made after decades’ worth of hard work—a well-deserved reward for an honest living.
However, farmers often have to consider retirement from a different angle than other Americans.
Issues to Consider When Planning for Retirement
Farmers and farm families have to approach retirement carefully. Even if you are planning to pass on your farm to the next generation, you are not just taking leave from the workplace but likely turning over the title to a small and profitable business, too.
You may want to consider:
- What is your exit strategy? Are you going to sell the family farm outright or pass it down to your children or grandchildren? What will your role, if any, be in future operations? And, if you’re still helping out or acting as an adviser, should you be compensated for doing so?
- How will you pay for retirement? No matter whether you have savings or not, there are always ways to begin preparing for the day you hang up your hat and put away the work boots. If you are planning to move into a smaller—or larger—home, you will want to strategize and minimize your tax obligations. Even if you are planning to remain in place, you might have other expenses to consider.
- How will you eliminate or transfer your existing expenses? If you have insurance on your tractor, facilities, or other farm equipment, you may not be able to afford your usual policies after you have retired. If you plan on transferring the titles through sale or through gifts, you may need a plan to avoid the tax contingencies.
- How will you pay for health care? Do you already have a private policy, or are you planning to fall back on Medicare? Depending on your health and family history, you may need to buy a supplemental policy.
- What will you do with your land? If you don’t have heirs, you may wish to sell your home and farmlands. However, sometimes leasing the land and equipment can provide a passive, self-sustaining income that will last throughout retirement.
The Costs of Retirement
Nobody can tell you exactly how much your retirement will cost, but you can sometimes get a good idea by talking to older acquaintances and retired family members. Along with coming up with a monthly budget, you may want to think about:
- What you want to do in retirement
- Where you’ll go if you’re unable to take care of yourself
- How much money you have saved, and what you’re expecting to receive from Social Security or pensions from past jobs
When considering the costs of retirement, your plan should be proactive: do not assume that your costs, needs, and desires will stay static over the course of years or decades. You may be in good health in your initial years of retirement but need to shift into a retirement home or assisted-living facility later on.
Paying for Retirement
The key to a successful retirement—for all but the very richest among us—is early planning. Even if you are eyeing retirement in the coming years, there’s still a lot you can do to maximize your benefits.
Farmers, for instance, are still entitled to establish and access employee pensions—meaning that, over the course of years or decades, a responsible farmer may be able to fund their own retirement.
You can also set up a 401(k), plan your retirement to coincide with maximal Social Security disbursements, and invest in stocks or bonds to provide long-term returns.
How a Wealth Planning Attorney Can Help
Farms are business ventures and are subject to laws at the state and federal levels. A wealth planning attorney can help you devise a money-saving succession plan for your agricultural lands while keeping your tax obligation and burden low.
Beyond that, we can create a custom-made plan for your retirement: one which considers your finances, means, and post-retirement aspirations to give you the golden years you’ve worked hard to achieve.
Contact Us Today
Whether you’re planning to retire soon or are simply trying to keep one eye toward the distant future, Quraishi Law can help you achieve your retirement planning and wealth management goals. As an Arkansas-based firm, we have years of experiencing helping our state’s farm families prosper.
To get started, call us today or send us a message online to schedule your initial consultation.