Farmers need to look to tomorrow
As the days become shorter, the mornings become darker and the start of the new farming financial year approaches, a lot of people start to think about their futures.
Farm workers think about becoming contract milkers, contract milkers think about going share milking, share milkers may be looking to buy their first farm, while experienced land owners start to look at life beyond the farm.
No matter whether you are looking at entry, progression or exit, you will want to know – how can I improve and maximise my value? Each phase will be about maximising value for the future, and ultimately your retirement.
For most farmers, their retirement plan is centred around the sale of their farm, with the hope of living off the equity for their retirement years. According to Statistics New Zealand, the average life expectancy for men is now 86.2 years, and for woman its 88.9 years. This means most of us need to plan for at least 20 years in retirement.
Currently, if he retires at aged 65, as a single man living alone, would receive NZ Super $390.20 per week net – that’s approximately $20,000 a year.
On retirement, you will need a home to live in, some additional funds to live off, over and above your weekly super and then funds for other living costs such as vehicles and holidays.
Many retiring farmers also want to ensure their children are looked after too, even if none of them want to take over the farm it’s only natural to want to see them get into a home or business of their own one day.
No matter what age and stage you are at, it’s worthwhile spending some time formulating a plan of what your retirement might look like. Then you can sit down with your advisers to work out how to get there. A good starting point might be to attend the BDO Taranaki Farming Expo on Thursday, May 4 at the War Memorial Centre Stratford, from 10am - 2pm. A range of speakers, including former All Black Graham Mourie, will present seminar sessions targeted at rural people who are looking at entry, progression and exit, and is highly recommended to all in the rural community, as they plan for the future.
Registration is a $20 donation to the Taranaki Rural Support Trust, and includes lunch provided. www.bdo.nz/ farmingexpo