While farmers are often reminded to plan for the succession of their farm, they may be less likely to think about their own retirement.
To farmers, the word “retirement” can sound like quitting, or putting themselves out to pasture when their real passion is to work until they die. For others, retirement may seem like an unobtainable goal due to current financial issues.
In reality, retirement is a phase of life for most Americans — and how you want to spend it is determined long before you reach your senior years. This week, we will focus on the basic considerations of the retired life.
Where will you live? Changing your housing or moving to a different part of the state or country could increase or decrease your cost of living substantially. Even if you plan to stay in your current house, some of your costs will still change.
If you spend more time at home, your heating and electrical bills will likely increase. You also need to think about the long-term care and replacement of your appliances, including your furnace, and any structural repair or roofing you may need.
Be aware of how much you spend on transportation now, and how much those charges might increase over time. Will you keep your own car or truck, rely on public transportation or use a combination of both? If you keep your own vehicle, think about repairs, licensing and depreciation.
Will you dine out more often in retirement, or entertain friends and family more often? How much do you pay a year for lunches or other meals from restaurants? Remember that food costs, especially at restaurants, usually increase with time.
You’ll need to update your clothing from time to time, including coats, shoes and everything else. You’ll also need to buy personal hygiene products, cleaning and household care products.
You can sign up for Medicare, but you may also want to buy insurance to supplement the things Medicare doesn’t cover. You also need to remember that you may be responsible for co-payments, deductibles and other out-of-pocket medical expenses.
Also, the more we age, typically the more medical services we need, so you may be using the doctor’s office or hospital more in retirement than you do today.
What will you do to pass the time during retirement? Will you read, attend community events, or go shopping? Plan ahead so you will have plenty of discretional income.
7Recreation and travel
Are there places you want to see or activities you want to do, like fishing, hunting, tractor shows or something else? It’s a good idea to think about those costs so you can have an enjoyable time and stay active in retirement.
Next week: Save and prepare for retirement.
Sources: Purdue University Extension, Financial Planning for Retirement Workbook.
(Farm and Dairy is featuring a series of “101” columns throughout the year to help young and beginning farmers master farm living. From finances to management to machinery repair and animal care, farmers do it all.)
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