Retirement Planning for Farmers: Beyond Land Equity

Aug 25

Rethinking Retirement: Why Farmers and Small Business Owners Can’t Afford to Wait

The Overlooked Side of Farm Succession

When we talk about the future of farming, the conversation often starts and ends with succession planning—who takes over the farm, the business, or the operation. But there’s another equally critical piece of the puzzle: retirement planning. Unlike W-2 workers who can rely on pensions and 401(k)s, farmers, small business owners, and self-employed professionals walk a very different path to financial security.

In this episode of the Farm4Profit Podcast, we sit down with Levi Morrissey of Financial Architects, Inc. to unpack what retirement looks like when you don’t fit the “traditional” mold. With two-thirds of Iowa farmland currently owned by people over the age of 65, the stakes couldn’t be higher. A massive wave of transitions is already reshaping rural economies, small towns, and family farms.

The Psychology of Retirement in Agriculture

For many farmers, retirement isn’t just about numbers—it’s about identity. Stepping away from the farm means redefining one’s purpose, daily routine, and role in the community. Morrissey emphasizes that financial readiness and personal readiness must go hand in hand. A healthy retirement plan balances both.

Farmers vs. W-2 Workers: A Different Playing Field

W-2 employees can rely on employer-sponsored benefits like pensions or 401(k) matches. Farmers, however, often depend heavily on land equity—a risky strategy if land values fluctuate. Morrissey highlights tools like SEP IRAs, Solo 401(k)s, and SIMPLE IRAs, which can give farmers access to tax-advantaged retirement savings that provide more stability than just betting on land values alone.

Phased Retirement: Options Beyond Selling the Farm

Walking away cold-turkey doesn’t work for everyone. A growing trend in agriculture is phased retirement, which allows farmers to remain connected while stepping back gradually. Options include:

Leasing farmland for consistent income.
Crop-share agreements to balance involvement and profitability.
Custom farming arrangements to keep land in production without day-to-day management.

This approach eases financial pressure while keeping identity and legacy intact.

Tax Benefits Farmers Shouldn’t Miss

Retirement planning also intersects with tax strategy. For example:

Iowa retirement exemptions allow income from farming operations (if you’ve materially participated for 10+ years) to be excluded from state taxes.
Beginning farmer tax incentives reward those who cash-rent land to new producers, strengthening the next generation while benefiting retirees.

Morrissey stresses that farmers who integrate tax planning into retirement decisions see significant long-term advantages.

Why Retirement Planning Matters Beyond the Farm Gate

Retirement isn’t just about one family’s financial security—it’s about sustaining rural economies and preserving farmland for the future. Without intentional planning, entire communities risk decline. With the right tools, retirement can be reframed as a new season of freedom, flexibility, and purpose.

As Morrissey puts it, the core question is simple: What does life after the farm—or after the business—look like for you?

Take the Next Step

Whether you’re a farmer, ag professional, or small-business owner, the takeaway is clear: retirement planning isn’t optional. It’s essential.

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