Driving into town to grab coffee and complain about weather and input costs too
Retirement Targets
- Thread starter yowza
- Start date
Come on BC, I am sure we both know plenty of farmers in their 60's and 70's and using the term physically fit would not be the way to describe them. True they have to physically do a few things, but driving the tractor around the field is not nearly as physical as the person on the back of the hayrack, loading the bales, like in the old days.
Tracks on tractors and no need to mess with duals. Custom spray crops so just call the Coop. Have it custom harvested and hauled. Always a hungry farmer hoping to be the tenant when the old guy quits. Mom and Pop tenant farmers who have little or no farm ownership probably need to farm on their small operations as they have likely paid little SS tax. Mom hopefully had a job in town. The rich mega farmers hire help to do the hard work. Making too much money to quit now.
A lot of the farmers around here that I know start transitioning in their late 50's to early 60's of moving away from the day-to-day operation and having their children that want to farm start doing more of it. This is also the time many start moving ownership of the land over to their children slowly to avoid paying estate taxes on the land when they pass.
If they do not have children that want to farm, then they continue to farm a few more years, and then start renting out the land and selling off their equipment, slowly over time. Cash renting out paid for farmland a guy can make a nice profit with very little stress about the harvest and the weather.
Most family farms today are set up as trusts, which helps pass the land and equipment to the next generation easier and cheaper. I was amazed at the amount of checks we received for my mom's memorial written on farm accounts that were in a trust. Smith Family Farm Trust, as an example.
If they do not have children that want to farm, then they continue to farm a few more years, and then start renting out the land and selling off their equipment, slowly over time. Cash renting out paid for farmland a guy can make a nice profit with very little stress about the harvest and the weather.
Most family farms today are set up as trusts, which helps pass the land and equipment to the next generation easier and cheaper. I was amazed at the amount of checks we received for my mom's memorial written on farm accounts that were in a trust. Smith Family Farm Trust, as an example.
Its not age 65, it's the wear that happens from age 20 to age 50. Damage is done to joints and back in that timeframe.
Thinking people in the trades here. They are not as automated.
My experience is that in manufacturing it is still very common for hourly workers to be doing physically demanding jobs at 65. It is typical that they are not on the most demanding jobs, but they are still on jobs that I know would kill me at 56. I used to work for Ford and many of those people could retire early because they started working at a very young age and the big companies offered pensions. Now pensions are mostly gone and people have to work longer due to the lack retirement savings.
Probably most demanding would be maintenance type stuff for farmers now. Unplugging a combine, etc. Many farmers are their own mechanics. Not sure if it has changed a great deal in the last 3 decades, but can recall castrating hogs was very physically demanding event back in the day. We didn't have the hog confinement facilities. They were more free range.
I know I don't ever see anyone out picking up rocks or baling hay like we did back then. All more automated for sure.
Never said they were physically fit, but there is more physical labor there than you are thinking, unless they are extremely lazy and hire everything done basically.
I cringed when you mentioned selling farmland to kids. It’s a major financial blunder if the parents and kids trust each other. Also, I wonder if those trusts are revocable or irrevocable. I know there were a few big Ag lecturers pushing irrevocable trusts. While they stop care centers from ever being able to touch those assets, it also hand cuffs the heir that gets it somewhat.
Sure - I was mostly using 65 just because any adjustment in the SS age would be from there, but I understand what you’re saying.
I didn’t even think of farmers, I guess because many of the ones I’ve been around seemed to have that occupation so connected to them that they never wanted to quit, but that is certainly physically demanding. I guess you could always rent your land as a form of retirement…depending on your debt, etc.
Raising the SS cap may actually lower the amount of money going into SS because people making above $160,000 a year would just register an S Corp, negotiate job offers to be Corp to Corp, and pay themselves "reasonable compensation" as w2 income and take the rest as a distribution that bypasses FICA / Self Employment taxes. The vast majority of people making those salaries are already businesses, and the types of people who are making that much as employees are the ones in high demand who could negotiate that employment setup.
You need a lot of workers to take care of children and the elderly. I'm sure they'll try to remove the cap, but it won't help and Social Security will still be completed f'd unless we somehow fix the demographic problems of having so few workers be of working age or something like AI takes over the entire economy and makes worker productivity unimportant. Otherwise you just don't have enough workers to support the non-workers.
The US Population Is Aging
As a 30 something year old I'm taking my retirement into my own hands and assume social security won't do anything for me in retirement.
None of the farmers I know would be described as lazy, but no its not a physically demanding job. I was talking to my cousins kid a couple of weeks ago, he and his dad farm put in around 3200 acres. I was asking him how long it takes for them to get the crops out. He replied running their two combines, getting good weather, 19 days from start to finish. He stated it takes a little longer to get plant, but only a few days.
None of famers I know are selling the land to the kids, they are using a trust to shift ownership over to them. Now they may not actually "own" the land, much like wealthy people do not own their homes, boats and planes. But they sure get to use them.
Raising the SS cap may actually lower the amount of money going into SS because people making above $160,000 a year would just register an S Corp, negotiate job offers to be Corp to Corp, and pay themselves "reasonable compensation" as w2 income and take the rest as a distribution that bypasses FICA / Self Employment taxes. The vast majority of people making those salaries are already businesses, and the types of people who are making that much as employees are the ones in high demand who could negotiate that employment setup.
You need a lot of workers to take care of children and the elderly. I'm sure they'll try to remove the cap, but it won't help and Social Security will still be completed f'd unless we somehow fix the demographic problems of having so few workers be of working age or something like AI takes over the entire economy and makes worker productivity unimportant. Otherwise you just don't have enough workers to support the non-workers.
The US Population Is Aging
www.urban.org
As a 30 something year old I'm taking my retirement into my own hands and assume social security won't do anything for me in retirement.
They are already doing that. Usually a $50k or so draw for wages subject to SS. Good for you. Just remember that there are SS benefits for your minor children and surviving spouse if you should die. And remember that SS benefits have a COLA which more or less protects against inflation. Your stock dividends are not hedged against inflation.
Eliminate the SS earnings cap. Or everyone loses 36 monthly checks when retirement age is raised to 70. Those are the real choices.
Then you change the tax law to make S Corp pay in.Raising the SS cap may actually lower the amount of money going into SS because people making above $160,000 a year would just register an S Corp, negotiate job offers to be Corp to Corp, and pay themselves "reasonable compensation" as w2 income and take the rest as a distribution that bypasses FICA / Self Employment taxes. The vast majority of people making those salaries are already businesses, and the types of people who are making that much as employees are the ones in high demand who could negotiate that employment setup.
You need a lot of workers to take care of children and the elderly. I'm sure they'll try to remove the cap, but it won't help and Social Security will still be completed f'd unless we somehow fix the demographic problems of having so few workers be of working age or something like AI takes over the entire economy and makes worker productivity unimportant. Otherwise you just don't have enough workers to support the non-workers.
The US Population Is Aging
As a 30 something year old I'm taking my retirement into my own hands and assume social security won't do anything for me in retirement.
I have assumed 0 SS all the way also and I am more than a couple decades ahead of you.
The demographics is a big thing. SS actually only had about a 30 year problem. The boomers had low amounts of kids. Gen X has turned that around a smidge but with the few amount of them, there will be less people retiring. So getting through the next 25-30 years and then it almost straightens back out. Once again, the boomers made a mess and are at fault here.Raising the SS cap may actually lower the amount of money going into SS because people making above $160,000 a year would just register an S Corp, negotiate job offers to be Corp to Corp, and pay themselves "reasonable compensation" as w2 income and take the rest as a distribution that bypasses FICA / Self Employment taxes. The vast majority of people making those salaries are already businesses, and the types of people who are making that much as employees are the ones in high demand who could negotiate that employment setup.
You need a lot of workers to take care of children and the elderly. I'm sure they'll try to remove the cap, but it won't help and Social Security will still be completed f'd unless we somehow fix the demographic problems of having so few workers be of working age or something like AI takes over the entire economy and makes worker productivity unimportant. Otherwise you just don't have enough workers to support the non-workers.
The US Population Is Aging
As a 30 something year old I'm taking my retirement into my own hands and assume social security won't do anything for me in retirement.
It depends. Most farmers now are running things like your example. But my 74 year old Dad farmed 400 acres with a small, old combine and old equipment. It was pretty physically demanding and combining and planting did take a while (especially with a non-farm job as well). Climbing in and out of equipment and over fences can be hard on the knees and hips. He always said you either had to go really big in farming or stay pretty small. He chose to stay small. But that meant that he did it all himself, so it could take weeks.
Now that he's retired and dealing with some health issues, he hires out the combining and planting. What took him weeks on his on, now takes a few days.
It's kind of a stretch to place the blame on us boomers for retiring, the entire country has known about this problem for decades and refused to do much of anything about it. Like you stated, the problem will correct itself once a majority of the Boomer generation dies off, but it's going to get worse before it gets better because the later part of the generation, my group, is just now reaching retirement age or will in the next 5 years.
Take the cap off is the best and easiest way to ensure that SS survives, and effects the fewest amount of people, many of whom are wealthy enough to be able to afford the loss of the money.
Really? It’s been over 40 years since we last made changes. FFS just eliminate the earnings cap.
Have u ever been a business owner? Business owners are last on the list to get paid and also after the bank if they have debt. Been there and done that. My employees were generally paid 20% more than market conditions and industry expectations.
