Never retire? Financial planning and farm families

Abstract

Purpose: This paper informs practitioners, farmers, and policymakers about challenges U.S. farm families face when preparing for retirement, with a focus on financial planning and Social Security benefits. Methodology: Data from a 2024 survey of 312 Wisconsin farm owners was summarized using probit models. Findings: Planning behavior varies by age, income, and farm characteristics. While some families actively plan, many lack formal succession plans. Some farmers use financial professionals for help, but many lack clear strategies, including around Social Security. Practical implications: The study highlights the need for tailored planning resources for older and family-run farms. It also sheds light on challenges of retirement, offering insights for those supporting rural communities. Theoretical implications: While farmers planning for retirement should make rationally informed expectations regarding their need to smooth consumption in old age, only one-third have a retirement age planned. This may reflect myopia, procrastination or a lack of reliable information for making financial plans. Given this context, government social insurance programs for retirement income may be especially important. Value: Findings emphasize the importance of financial planning for farming families and the value of specialized services to support retirement preparedness.