| WASHINGTON, May
5, 2005, PRNewswire: America's farmers are at
a higher risk of experiencing declining standards of living
in retirement, according to a paper released today by
the American Corn Growers Association (ACGA) and Americans
for Secure Retirement (ASR).
The study, entitled Lifetime Income Crucial to Farmers'
Retirement Security, warns Congress that to provide
farmers with a secure retirement, "the challenge
goes far beyond Social Security." Measures must
be implemented that would help turn farmers' hard earned
assets into funds that will provide steady income for
The report details how farm and ranch operators and
their workers face significant and unique obstacles
in planning and providing for their retirement. "With
less access to employer-based pensions and volatile
business risks, farmers often face a more difficult
retirement path than the average American," noted
Larry Mitchell, CEO of the American Corn Growers Associations.
The study recommends that policymakers should encourage
investments in retirement vehicles that provide steady
income that cannot be outlived, such as lifetime annuities,
to complement Social Security. Lifetime annuities are
specifically helpful to farmers because many have real,
tangible farm assets -- such as farm land, machinery
and livestock -- and non-farm assets such as stocks,
bonds, real estate and cash -- that if managed properly
can essentially provide a "paycheck" for life.
Key findings of "Lifetime Income Crucial to Farmers'
Retirement Security" include:
- Farmers are less likely to participate in employer-sponsored
plans, further limiting their sources of retirement
income. Just 30 percent of agricultural workers in
America work for an employer with some form of retirement
plan. Even more startling, less than a quarter actually
participate in a retirement plans. That means that
the vast majority of farm workers, they have no other
guaranteed sources of retirement income beyond Social
- Farming, as a business, is far more volatile than
most, making saving for retirement more difficult.
Everything from weather and biological risks to global
economic conditions to policies can cause significant
variation in farm income. These factors combined illustrate
why the variability of farm household income far exceeds
that of average US households
- Retirement ripple effect created in rural communities.
Of the 386 counties in the US with persistent poverty,
340 of them are rural. Retired farmers and farm wives
that outlive their savings only add to the demands
that strained local governments are facing to provide
health, transportation and other social services to
the poor and elderly.
- Farm wives are particularly vulnerable to declining
standards of living in retirement. Because they live
longer than men, an average 65-year old woman can
expect to live nearly an additional 20 years, and
there is approximately a one in three chance that
she will live to age 90, farm wives are especially
at risk for drastic declines in their standard of
living in retirement. According to the USDA, two-thirds
of rural persons age 60 or above earning less than
$10,000 were women and by age 85 the statistic jumps
A bill introduced in Congress earlier this year called
The Retirement Security for Life Act (H.R. 819, S. 381)
would address many of the issues cited in this report
and is gaining bi-partisan support among key legislators.
Under the proposal, individuals would not pay federal
taxes on one-half of the income generated by lifetime
annuities, up to a maximum of $20,000 in excluded income
per year. For a typical American in the 25 percent tax
bracket, this would provide an annual tax savings of
up to $5,000.
Mitchell added, "We believe that legislation that
encourages lifetime annuitization would give farmers
more tools to control their retirement standard of living."
The American Corn Growers Association and eight other
farm advocacy groups have joined Americans for Secure
Retirement in supporting the legislation. For more information
about the Retirement Security for Life Act or how lifetime
income is crucial to farmers' retirement security, visit
the Americans for Secure Retirement website at http://www.paycheckforlife.org/.
Source: American Corn Growers Association; Americans
for Secure Retirement.