Annie's Project presentation

1. Rutgers Cooperative Extension
Later Life Farming Online Course
Barbara O’Neill, Robin Brumfield,
Stephen J. Komar, and Robert Mickel
Rutgers Cooperative Extension

2. Project Overview
• 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.
2

3. 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
3

4. Focus Group Question Topics
• 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
4

5. Major Findings
• 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)
5

6. Concerns About Retirement
Plans for the Self-Employed
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.
6

7. Farmers’ Concerns Regarding
Retirement
• 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.
7

8. Later Life Farming: Creating a
Retirement Paycheck
• 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)
8

9. 9

10. 10

11. 11

12. 12

13. 13

14. 14

15. 15

16. 16

17. 17

18. 18

19. 19

20. Questions? Comments?
Dr. Barbara O’Neill
Rutgers University
oneill@aesop.rutgers.edu
Later Life Farming Web site address: http://laterlifefarming.rutgers.edu/
20