Later Life Farming

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Later Life Farming

  1. 1. Rutgers Cooperative ExtensionLater Life Farming Online Course Barbara O’Neill, Robin Brumfield, Stephen J. Komar, and Robert Mickel Rutgers Cooperative Extension
  2. 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. 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. 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. 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. 6. Concerns About Retirement Plans for the Self-EmployedSeveral FG participants avoided tax-deferred savings plansfor 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. 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. 8. Later Life Farming: Creating aRetirement 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
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  20. 20. Questions? Comments?Dr. Barbara O’NeillRutgers Universityoneill@aesop.rutgers.eduLater Life Farming Web site address: http://laterlifefarming.rutgers.edu/ 20

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