Money Mentor: how to prepare a plan for your retirement income

I’ve been thinking more about the future lately. My husband and I are in our early 60s and have been farming full-time for over 30 years. We’re now considering handing the farm over to our daughter, who’s in her late 20s and deeply involved in the

day-to-day running of things. While we’re confident she’s capable, what’s starting to concern me is how we’ll manage financially once we’ve stepped back. We don’t have a private pension in place, just the State Pension to fall back on. How can we make sure we’ll have enough to live on comfortably in retirement without putting financial pressure on our daughter or the farm?

ANSWER: your question is one we hear often, and it’s fantastic that you’re thinking ahead. Planning for retirement is essential, particularly in a farming context where family, land, and legacy are closely tied together. You mention considering handing over to your daughter, a big step, and one I’m sure she will take in her stride. However, you haven’t mentioned a timeline for this handover, provided there are a few more years before this transition, you have an opportunity to dive into your retirement planning and set yourselves up for some well-deserved golden years.

The State Pension is a helpful start, but not the full picture. Currently, the State Pension provides around €14,000 annually per person from age 66. While that offers a helpful base, it rarely covers everything, especially for those used to the full-time demands (and expenses) of running a farm.

You’ll want to ensure your personal retirement income is enough to maintain a decent quality of life without relying on the business or your daughter. That means calculating your needs now and identifying how to bridge any shortfall.

Retirement income needs

Think about your expected outgoings in retirement:

• Will your mortgage or loans be fully paid off?

• What level of comfort or travel would you like?

• Will you continue to live on the farm, or move elsewhere?

As a rough guide, many people need 50–70% of their pre-retirement income to live comfortably. If you typically lived on €43,200 as a household, you might need at least €21,600–€30,240 annually in retirement.

Subtracting the State Pension (about €28,000 combined), you may be okay on paper. But that doesn’t leave much room for inflation, emergencies, or extras like holidays, healthcare, or home upgrades.

Strengthen your plan

1. Make use of any remaining pension contribution time – you can still contribute to a private pension up to age 75. As someone in your 60s, you can contribute up to 40% of your net relevant earnings with generous tax reliefs. If you can afford to make lump-sum contributions before retirement, this is worth considering.

2. Consider the use of farm assets for income – depending on your farm structure, leasing part of the land (to your daughter or a third party) may provide a steady income stream. There are also generous tax exemptions on long-term leases.

3. Protect the farm’s viability post-succession – make sure your daughter isn’t financially burdened by your retirement. Transferring the farm doesn’t mean giving up income entirely, but it may require formal agreements, such as a right of residence or structured leaseback.

4. Review all available state supports – check your eligibility for:

• Farm Assist (if income drops below a certain threshold).

• Fuel allowance or medical card entitlements.

• PRSI contribution records to maximise pension benefits.

Delaying can limit your options

The earlier these discussions happen, the more tools you’ll have. Many farming families leave retirement planning too late, only to realise they need to draw on the very farm they’re trying to pass on.

Having a plan in place reduces pressure on your daughter and gives everyone clarity. If there are siblings involved, it can also help avoid future disputes over fairness.

Calculate your budget: determine how much you can afford to save each month.

Determine your goals: sit down together and discuss what you want your retirement to look like – does it include holidays, are there any home renovations needed in your future?

Explore pension plans: a financial advisor can tailor a plan based on your goals, income, and tax situation.

Martin Glennon is head of financial planning at ifac, the professional services firm for farming, food and agribusiness