Are you financially ready for farm transition?

A key step in farm transition is understanding the finances of the farm operation and people involved.  Answer these questions to help form a clearer picture of your current situation and desired financial vision.  

Questions to ask

  • What's important in your retirement years?
  • What's the true cost of living? How much net income do you need to support current lifestyle and additional retirement needs?
  • Do you have a financial cushion for unforeseen events?
  • What's going to change in your retirement years that will require additional funds?
  • What are your living plans during retirement? For example, do you want to renovate, buy a new house or a new car? Can you afford the payments on your assets?
  • Do you have assets you can sell?
  • Are there other ways to generate income?
  • What assets would you like to leave to your successor?
  • What assets would you like to leave non-farming family members? Does this affect retirement goals?
  • Do you have a strategy for becoming more involved in  business financial decisions?
  • Do you have a detailed business plan that outlines your financial needs and future farm plans?
  • Is there a need for formal agreements (i.e. operational, partnerships, shareholder) to ensure a solid income from the business?
  • Have you reviewed your plans with a team of trusted advisors (consultants, accountant, lender, lawyers)?
  • Have you assessed the current owner's financial needs against your business plans? Does it all balance out or do you need to make changes?
  • Will you need to generate off-farm income to support the operation?
  • Are there investment opportunities for others (i.e. non-farming siblings)? 
  • How much money is needed from the farming operation to look after the current owner's retirement?
  • Can the farm debt service the buy-out with a lump sum and or annual income?
  • Will the future plans of the farm be affected after paying out the dollar figure? For example, will expansion plans need to be put on hold?
  • Is the farm still able to maintain a good line of equipment and manage barn facilities after paying the current owner?

Make farm transition easier

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