By Jeanne Bernick
Top Producer Editor
Are annuities something farmers should consider investing in when they have a good income year? Some financial advisors say yes: An annuity would mean the farm doesn’t have to supply as much income to the retiring generation.
An annuity may be an appropriate technique in certain cases, says Josh Sylvester, a Certified Financial Planner with Legacy by Design, a succession planning firm based in Chico, Calif. “Most agribusinesses reinvest exclusively in the business, tying up significantly all of their assets in the farm, leaving little or no liquidity or reservoir for a financial downfall and no money for retirement,” Sylvester says. Adding a layer of diversification may enhance the senior generation’s financial security, he adds.
“I think that annuities will start to become a better income alternative for farmers,” says Paul Neiffer, CPA with Hansen NVO PS accounting firm. “With the dramatic up and downs in the stock market and farmland, locking in current income with an annuity will start making more sense.”