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Retiring 'in a few years'

Problem Submitted By H.W., Ohio

My father is planning on retiring, as he puts it, "in a couple of years."

Here is his plan: He's worked out his estate to transfer a big chunk of the operating LLC's entity to me now. He'll stay on as managing member with some income and get lease payments on the land until he dies. After that, control of the operation will be mine, and the land will pass to me and my two sisters.

I'm very worried about how this is going to work. Dad says they'll travel and be gone most of the time, yet they're keeping the homeplace. He's never done anything but work, even when Mom begged him to travel.

My best friend tells me I should be grateful Dad worked it all out and is giving me the farm. I tell him I'm worried -- not about what happens after he dies, but what happens while he's alive. I feel we're heading into trouble. Am I right? If so, what should I do?

Dr. Jonovic's Solution

It's not that H.W. is being paranoid. His concerns, though more general than specific, are justified. Actually, his dad should be worried as well.

We don't know enough about H.W.'s situation to give specific advice, but experience with a lot of retirees over the years can be summarized in the following Five Uncomfortable Facts of Retirement. They may help H.W. address his fears and provide some ideas for other dads with similar retirement plans.

1. Retirement while keeping control of the operation is a dangerous game with successors as victims. The retiree, in essence, flies the airplane from the ground by remote control. The pilot in the cockpit is at the mercy of ground control -- a potentially fatal situation.

2. Retirement that assumes the retiree's total separation from the business is a waste of wisdom and experience. Simply walking away deprives the next generation of useful knowledge and denies the older generation the opportunity to share hard-won expertise.

3. Retirement funded by income from the business becomes an anchor for everyone. Farming is about taking risks, which is how farms are built and how they grow. But when major retired owners depend on the farm for financial security and have no cushion of their own, they will live in anxiety, fight risk, and cripple management. Everybody's future is compromised.

4. Retirement that assumes enjoying activities ignored over a lifetime is a self-delusion. Why would the retiree plunge into those in retirement? With nothing to do, the new activity is apt to become meddler-in-chief.

5. Retirement is not a solo act. Career changes usually happen to couples and families -- not just to individuals. If harvest years aren't planned together and mutual expectations and needs aren't considered, bonds of marriage can become the shackles of imprisonment.

H.W.'s dad's retirement plan ignores each of these facts of life. He's keeping control, walking away from the operation, depending on the farm for his income, planning on activities he's always disdained, and defining the whole plan by himself. H.W. is right to be concerned.

Father and son have probably spent more time planning a grain sale than this retirement. Maybe H.W. should drop these five facts on Dad's desk for thought and a lot more discussion.

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