| 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 life.
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
- 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 Security.
- 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
health, transportation and other social services to the poor and
- 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