Ready to Retire?

April 29, 2011 10:33 PM
roger dell
Now that he’s retired from farming, Roger Dell enjoys boating.
Photo: Pam Smith

There’s Nothing Wrong with Hanging Up Your Boots 

These days, Roger Dell is more likely to wear a pair of boat shoes than work boots. The hand that once negotiated the turn rows of his Westminster, Md., farm now guides a 48' sportfishing boat about the estuaries of Chesapeake Bay. The scent of saltwater, in his opinion, is a worthy replacement for the first whiff of freshly turned soil.

Last year, the 62-year-old Dell decided it was time. Neither of his children was interested in returning to farm. However, his partner and brother, Greg, had three sons living on the farm and some of his children were already showing interest.

"Farming is and has been very important to me, but I made my mind up a long time ago that I wasn’t going to let it be everything," Roger says.

Farm Journal has followed the Dell family for the past two years as part of the Farm Journal Legacy Project. Succession planning expert Kevin Spafford and his team complete a financial needs analysis of all active family members during the process.

Financial security.

"This exercise is especially important for the senior generation, which may be transitioning out," Spafford says. Addressing financial security includes looking at business and nonbusiness assets and comparing projected financial obligations against projected personal
financial resources.

"For Roger, we determined what value he needed to derive from the business to reach his goals," Spafford says. "We then isolated the business assets and determined a 20-year payout that will provide Roger and his wife, Deanna, enough income to bridge the gap without compromising the
integrity of the operation."

In negotiating an equitable settlement, the Dell brothers faced a situation common when one partner retires. A one-time cash buyout would not only have put the farm on tough financial footing but also have tax implications for Roger. "I was exiting the farm to make room for more people, not to put added stress on it," he says.

To sidestep the issue, Roger receives an annual note payment and an hourly wage for working on the farm. He pays for his own medical insurance.

Although having it provided by the farm sounds good to a retiree, promising to cover Roger’s health insurance for life would have been an open obligation to the farm.

Since Roger’s payout is spread over two decades, Spafford also evaluated the life insurance holdings of all the Dells to protect both brothers. The Dell family knows only too well that the unexpected can happen.

In September 2010, Tommy Dell, a third-generation partner and Greg’s son, was killed in a farm accident. Roger says Tommy’s death has given him plenty of reason to pause and consider what’s important in life.

"I’ve been at the farm a little more than I might have been otherwise, but it’s still purely an advisory role. We miss Tommy and his abilities, but everyone is stepping up to make the farm function," Roger says.

Sibling differences.

Greg couldn’t be more different when it comes to retirement. "Roger is probably the smart one," Greg jokes. "Farming is my job, my hobby and my life. My kids all live within a few miles of me and this is what I do."

Spafford admits that retirement should probably be a more frequent topic in the succession planning process. Some hard-charging farmers consider retirement the equivalent of giving up. Others have trouble relinquishing power. Sometimes the work ethic is so strong that individuals have no idea of how to have a life beyond the farm gate.

"In some cases, not retiring is just fine too. In succession, we don’t talk about retirement in terms of ‘riding off into the sunset,’" Spafford says. "We think of it as working in a different capacity. The retiring generation becomes a mentor to the younger generation and acts as chairmen of the board."

The key for Roger is having a passion for the boating life. "I bought my first boat 41 years ago and couldn’t get enough of it. My wife is also a boating enthusiast," he says.

"I feel fortunate to have found something else that feeds my soul beyond farming. I feel good about stepping away so the next generation can grow. I had my time."

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