Planting the seeds for retirement: A guide for young farmers

As a young or beginning farmer, there’s a lot vying for your attention, from building your operation and managing risk to simply making it through the next season. But even though it may be decades away, it’s always a good idea to think about and plan for how you want to one day retire.

“Retirement planning isn’t about giving up farming. It’s about ensuring you have choices and security when the time comes,” said George Schein, Technical Director, Nationwide Advanced Consulting Group.

The earlier you start planning for retirement, the more options you’ll have down the road. Here are a few actionable steps you can take today to firm up your retirement plans and start taking steps to making them happen.

Start with an end in mind

Successful retirement planning takes intentionality and the right mindset. Schein recommends thinking long-term even when it comes to the immediate steps you need to take to start planning for when and how you want to retire.

“It’s never too early to start planning for retirement, even if you’re just starting out as a farmer or rancher,” he said.

To begin forming the foundation of your retirement plan, start by asking yourself key questions like:

• Where do I want to be in 10, 20 or 30 years?
• What kind of life do I envision for myself and my family?

Account for rising costs

Retirement planning is ultimately about preparing for the financial realities of aging. Health and long-term care costs can be significant, and especially in recent years, have risen sharply.

“Many farmers assume their land or farm will be their retirement,” Schein notes. “But it’s critical to account for rising health care costs, life expectancy and the unexpected. Diversifying your retirement strategy can help you avoid financial strain later.”

Explore retirement savings options

Farmers have unique opportunities to save for retirement through plans tailored to the self-employed like individual retirement accounts (IRAs) and Simplified Employee Pensions (SEPs).

Any individual worker can establish an IRA, and there are two primary types:

• Traditional IRA.Contributions are tax-deductible, with a $7,500 annual limit in 2026 (or $8,600 if you’re over 50).
• Roth IRA.Contributions are not tax-deductible, but “qualified distributions” — those that meet certain IRS requirements — that (hopefully) include earnings, are tax-free. The contribution limit for a Roth IRA is the same as the traditional IRA, but once an individual’s modified adjusted gross income (“MAGI) reaches a certain amount, their ability to contribute to a Roth IRA begins to be phased out and will eventually be completely disallowed once a higher MAGI threshold is reached.

A SEP is a specific sub-type of IRA that in 2026 will allow an individual to invest up to the lesser of (a) 25% of their eligible compensation, or (b) $72,000. Those contributions are based on net self-employment earnings. But unlike a traditional or Roth IRA, you have to be either officially self-employed or an employer to establish an SEP.

“Even small, consistent contributions to a retirement account can grow significantly over time,” Schein advises. “The earlier you start, the more you benefit from compound growth.”

Maximize off-farm benefits

If you or your spouse have off-farm employment, take full advantage of employer-sponsored benefits like 401(k) plans, employer-provided healthcare and life insurance. “These benefits can complement your farm-based retirement strategy and provide additional security for your family,” says Schein.

Enlist a team of trusted advisers

If you’re just starting out on your farm, retirement may seem like a far-off concept. But it’s never too early to start planning. By shifting your mindset, understanding the costs, exploring savings options and maximizing opportunities, you can plant the seeds for a secure and fulfilling future.

“Retirement planning is about giving yourself choices,” Schein said. “It’s about ensuring that when the time comes, you can decide what’s next, whether that’s continuing to farm, passing the operation to the next generation or enjoying the fruits of your labor in a new way.”

Get your retirement planning started by contacting your farm’s trusted advisors, from your lender and CPA to your financial specialist. Get connected to a financial specialist who can help protect your farm, family and future.