Annie’s Project – Education for Farm Women Annie’s Project – Education for Farm Women a 501(c)(3) organization.

Retirement Planning Part 1 Farming: Planning for “Some Day” Your Future Years What is your own personal definition of retirement? For many farmers it doesn’t mean walking away from the farm completely, especially if you still plan to live on the farm. But does it mean slowing down, allowing others to take on labor and management decisions? Will you just “help out” during the busy season and live in a warmer climate in the not so busy season? If you do plan to move off the farm, perhaps because the next generation needs to be closer to the operation than you do, what does that mean for you? Live in town, build another house somewhere on the property? It is important to start thinking and planning for these decisions..not only for the older generation, but so the older generation can communicate their plans with the successors so they can plan as well. Using some of the information from the earlier goal setting activity, we want to help you explore ideas on what you are going to do in your future years and where you’re going to live and what brings joy, accomplishment and meaning to your life after you downshift from full-speed farming. The financial considerations will be addressed in session #?

I think the sheep on the left maybe should have done a little more research into this “retirement package” that’s been offered. But this does illustrate the idea you should really think about what you want in your later years, and plan to make it happen, rather than accept the standard “package”

What is Your Retirement Fantasy? Retirement Fantasy Activity: My Retirement Fantasy activity - worksheet Several markers for participants Directions to participants: DRAW your ideal retirement – don’t put financial, geography, health or other parameters/constraints to your IDEAL retirement. Try not to use words, but depict your ideas in pictures. Very simple drawings work, stick figures work, abstract works. Symbols work. You have 5 minutes to draw. Instructors should have their own prepared drawings to share with the group as a starting point, allow a few volunteer participants share their drawings

Who Are You? Which of the following four options describes you best? A. “Here are the keys and the farm checkbook kids. We’ll call you from Florida.” “We’re ready for a break from the labor….but we’re not quite ready to retire. We’d like to get to full retirement to maximize social security, but that won’t be enough.” So, thinking about your Retirement Fantasy drawing and maybe even what your partner/spouse might draw, which farmer are you? Let’s look at four options starting with the two on this slide and the two on the next slide.

Who Are You? C. “We’d like the on-farm child to be able to continue, but what about the off-farm children? A fair inheritance isn’t always equal D. “The kids can have it when they pry my cold, dead hands off the tractor steering wheel!” So, thinking about your Retirement Fantasy drawing and maybe even what your partner/spouse might draw, which farmer are you? Farmer A and D are pretty extreme – and for farmer D, hopefully RARE! But you do have to be honest with yourself and consider what do you want to do in retirement. And if your Retirement Fantasy looks a little or a lot like where you’re living now, what you’re doing now, but you get to pick and choose your jobs, and responsibilities, that might be the perfect retirement fantasy for a lot of farmers. But, with that being said, you have to be honest with your heirs on how you’d like your retirement looks, because that is going to affect their working environment for several years, even decades. You need to have a conversation on how to balance the financial needs of both the older and younger generations but also the day to day things, so neither generation starts to resent the other.

Farmer Retirement & Succession Survey Baker, J.R., Epley, E. 2009. Iowa Farmers Business and Transfer Plans. http://www.extension.iastate.edu/bfc/pubs/IA%20Farm%20Business%20survey%20results.pdf 70 60 50 40 30 20 10 (http://www.ers.usda.gov/AmberWaves/April05/Features/FarmRetirement.htm ) may want to include some of this data somewhere. This is 2001 data, but think the study could be used http://www.farmfoundation.org/news/articlefiles/85-mishrapaper10-1-03_version3.pdf We could also use new ARMS data. Figure 4.13 compares responses from past studies in the U.S. and foreign countries of farm operators who were asked if they planned to retire someday. Comparing Iowa to other states shows that Iowans are more likely to either retire or semi-retire than their counterparts in the United States. However, comparing Iowans to farmers in other countries surveyed, Iowans as well as American farmers in general are more likely to never retire. Japan is the only country that deviates from this standard, having farmers who showed trends very similar to those in America. Definitions: Retire: provide no managerial control or labor to the operation Semi-retire: provide some managerial control and/or labor to the farm Never retire: maintain full managerial control and provide some labor to the operation Australia England France Ontario Quebec VA Japan NC NJ PA IA ’00 IA‘06 Will retire Semi-retire Never retire

What are your priorities for your farm and family for the future? Pic from Texas Farm Credit website… http://www.texascooppower.com/texas-stories/people/seeds-of-change-simply-a-maize-ing This is the Ken & Laurie Graff from Hondo, TX

Other Farmers’ Priorities Preservation of the family farm Financial viability of the family farm Farm as a retirement package Research by Ron Stover, Mary Kay Helling, South Dakota State University, 1997.

Research Says When asked about what they would miss when they retire or semi-retire, the most common responses are connected with lifestyle, described in several different ways.  Several Australian farmers expressed the loss of being in the outdoors, with one stating: I will miss the solitude of the place, the views, the company of the animals, the night sky and the privacy. Australian farmers all noted the loss of an active lifestyle, open spaces, and the independence that farming allowed them to experience.  When asked what they would not miss about farming, Australian farmers noted the long hours, hard physical labor and working in extreme weather conditions are all things they would not miss after retiring from farming. This is a small blurb from a report. More details in the teaching outline. https://rirdc.infoservices.com.au/items/07-066 (Barclay, Foskey & Reeve)

Research Says A study that included farmers in Canada, England, Australia and the United States found there are differences in age of when responsibilities are given to the successor and types of successor: those that take the direct route and those that take a diversion route. The successors that take the direct route are more likely to develop intangible assets such as managerial skills. Financing retirement has differences between countries: Canada relies more heavily on selling assets such as land, England relies more on private pensions, but all countries use a variety of funding methods. The study also includes data on degree of retirement. The United States led the way for farmers never fully retiring from the farm.

Research Says Farm families often differ from other workers. Many are emotionally attached to their primary investment (farmland), and they don't expect to retire (i.e., stop farming) as much as reduce work hours or the scope of their operation.

Things to Think About… Identity/Control Social Physical Family Financial Professional Community support Faith Activities Identity/ Control: Who you are future years? Business Control? And self esteem Social - interaction with others (refer to Thrive book/radio interview for background information on what makes people happy: link in teaching outline) Physical - health and physical well-being Family – chances are there are people in your life that are really important to you. Financial – resources needed in future years (will discuss in detail in future session) Professional – continue farming, second career, part-time job, or none Community support – getting help when needed, giving support to others. Volunteer work Faith Activities – involvement with your church, exploring your spirituality

Some Day List Organize photos Play the piano Restore Antique tractors Family /Farm Genealogy Build a New Home Time for hobbies Travel Major purchases Clean Farm Office Play the piano Help with young person’s education Maximize investments Time with children and grandchildren Reading for pleasure People have a variety of goals over the years. What is important to one person may not be important to another. It is likely that you have goals that aren’t listed here. This is just a list to jump start your thinking and goals… Here are goals people have expressed in classes over the years…(review list) Don’t wait. Start trying out these activities/hobbies before you retire to see if you enjoy them

How to Get Started Think of one big-ticket and one little-ticket item Long term and short term – definitions Walk through example What are your long-term and short-term steps for your big and little ticket items Sometimes we need a “kick” to get us started Two pronged action plan – there are the big fantasy ideas (travel, etc.) and then the smaller day to day Big ticket items Little ticket items – very little planning, money…but you have to put it on a priority list or make time for them Big ticket items – traveling long distance and longer time periods. Planning how to pay for, research on where to go and what to do at the destination. Emotional/mental preparedness big ticket would be exploring a new career or building an estate plan – this takes thinking through goals, researching options and making difficult decisions Long term – is the BHAG – Big Hairy Audacious Goal Short term – action steps to move to the BHAG NOTE: Use future years action plan

Maintenance of Your Plan Re-visit your someday list periodically or after major life changes Communicate your goals with important people in your life Don’t delay; start now and work with a partner Make your list, check it twice and periodically see how you are doing with that list. Definition of “partner” for this slide: Spouse, friend, sister, child someone who will help, encourage & motivate to continue working through your plan

Exercise Pull out the page labeled “As I think about my future years.” Take a minute or two to fill in just the first two sections: These are words I want to use to describe my future years These are words that I don’t want to use to describe my future years ? Ask class members to share words that they want to be able to use – Go back around quickly – words they DON”T want to use to describe retirement

In My Future Years… These are things that I want to Do Be Have Contribute What do I need to be doing now to make this happen? As you start thinking about writing goals, What do you want to do in retirement? What do you want to be in retirement? What do you want to have in retirement? “Have” can be both material and non material. For example, you may want to have a nice home, have a vehicle replaced every 5 years. You may also want to have joy in your heart or have a good night’s sleep most nights. Think of both material and non-material things. What do you want to contribute in retirement? The first thing we often think of contributing is money. There’s much more though. Contributing time as a volunteer. Contributing a smile. informed voter in every election. Contributing an encouraging word to young people you meet. Finally, start listing what you need to be doing now to make this happen. List at least 3 things. I certainly understand that you’ll want to come back to this page and work on it this week.

Summary/Homework Worksheet 2-1 Timeline homework Communication Summarize work from session, how it will inform their homework activity and encourage participants to use these activities and worksheets as a way to open communication with family