A mentor of mine told me some years ago “…buy everything you need to retire with while you are working, because you’ll be too tight to buy it for yourself when you retire”. This advice supports the quote:
“Don’t simply retire from something; have something to retire to.” — Harry Emerson Fosdick
This article works through five practical stages: when retirement is likely to happen, what off-farm investment might achieve, which investment type fits that purpose, where the retiring generation may live, and how retirement planning can be separated from farm succession.
The aim is not to identify a single best investment, but to build a decision framework that fits the family.

Understanding the ‘Retirement Gap’ as a Farm Business Investment.

Farming holds substantial wealth in land, machinery and livestock, but those assets may not easily provide liquidity for retirement funding.

The idea of investing in non-productive assets for what you might consider to be “selfish end-goals” can be confronting. This reaction is entirely justified and highlights a gap in retirement investment thinking. Through the course of business, you have developed and practised habits of looking for the benefit of an expense (cost/benefit) for capital investments.

However, production investments have defined horizons compared with personal lifestyle decisions. Personal life plans and expectation horizons are less certain and require a different approach.

The best retirement investment is not always the one with the highest return; it is the one that best supports the family’s retirement and wealth succession objectives.

1. Retirement is not one decision — it has stages

Early family discussions introduce the idea that retirement from farming often happens gradually. Create a planning timeline with all stakeholders considered. It’s almost impossible to put an ‘end date’ on the timeline, but establishing reasonable expectations by anticipated ages of all generations promotes responsible decision making and behaviours.

Stages could include:

• Reduced involvement but ongoing ownership.
• Semi-retirement while still living on farm.
• Full transition of management to a new team.
• Relocation to a centre and community of choice.
• Later-life care and health support needs.
  [None of these assume farm succession to the next generation of the family.]

Investment implications:

• Earlier retirement investment may need income-producing assets.
• Semi-retirement may mean some of these investments need consolidating or converting to property assets to meet lifestyle needs.
• Later retirement may need liquidity and low complexity.

Note: Unforeseen health needs may require access to investment capital at short notice.

2. Has the purpose of an investment been defined?

This question challenges all primary stakeholders to clarify what the investment is meant to achieve. The investment path needs an end goal, so the path can be mapped to reach the required outcome.

Off-farm retirement investments should be assessed by purpose, not popularity.

A simple list of possible purposes might include the following, in no particular order:

• Provide a proportion of retirement income for parents.
• Fund a house away from the farm.
• Provide facilities to meet the parents’ interests and lifestyle objectives.
• Reduce reliance on the next generation.
• Support access to health and age care services.
• Create liquidity for aged care or unexpected costs.
• Provide fairness for non-farming children.

A fit-for-purpose investment starts with family questions, not pre-determined ideas or expectations. Clear purpose will be essential before seeking professional financial advice.

3. Match the Investment Type to the Job It Must Do

Is the right generation investing in the asset class?

Growth assets – Useful where retirement is still some years away and capital growth remains important.
Income-focused assets – Useful where the retiring generation needs regular cash flow.
Property assets – Can suit some families but may be less flexible if cash is needed quickly.
Liquid assets – Useful when health, aged care or housing needs may require quick access to funds.
Superannuation – Can be effective, but needs to be considered alongside age, contribution limits, tax position and access rules.
An investment can be technically sound but still unsuitable if it does not match the timing, liquidity requirements and lifestyle needs of the family. Seek professional financial advice.

4. Location, Lifestyle and Timing will drive Capital Needs

With the first 3 steps now on the table, it’s time to consider the transition from farming to semi-retirement and then to full retirement.

Does your situation require a stepped investment timeline?

Establish where you are on that timeline.

Staying on or near the farm (Is this an early step that can be afforded)

• Lower housing transition cost.
• Strong community connection.
• But possible issues with isolation, transport and health access.

Moving to a regional or metropolitan centre (Physical capacity and personal interests may lead to a move)

• Better access to medical, social and retail services.
• May require buying or renting suitable housing.
• Can still allow connection with the farm and family.
• Greater access to specialist care.

Retirement location is not just a lifestyle choice; it is an important planning decision.

5. Separate ‘Retirement Planning’ from ‘Farm Succession’ where possible

Investing in off-farm investments can reduce emotional and financial tension.

• Parents may feel more comfortable handing over control if they have some independent income that they retain control over.
• Successors may be better able to reinvest in the farm if they are not funding 100% of parental retirement from operating cash flow.
• Non-farming children may see a clearer structure for fairness.
• The family can make decisions based on business logic rather than personal dependency.

The more retirement security sits outside the farm business, the cleaner the succession conversation can become.

Once the family has clarified purpose, timing, lifestyle needs and succession pressures, the next step is to test whether the proposed investment strategy can hold up under real-world pressure.
-Test the Strategy Against Practical Risks
A quick checklist:

• Can the investment provide income if it is needed?
• Can capital be accessed if health circumstances change?
• Who will manage it if parents become less able or less interested?
• Does it create tax, estate planning or family fairness issues?
• Is the strategy still suitable if commodity prices, interest rates or land values change?

-Fit for Purpose Means Fit for the Family
“Off-farm investment planning is not simply about building wealth away from the farm.”
It is about giving the retiring generation choice, dignity and independence while giving the next generation a farm business that is not carrying more retirement pressure than it can sustain.

Your Task:
Bring these 5 steps to the table at your next family meeting.

• Use your advisor to work through these steps with you to discover where you are in the process.
• Talk through the options to achieve the goals with your professional financial planner.
• Question your accountant and understand the implications of investment/divestment transitions.

A good off-farm investment should answer a simple question:
Will this help the family live the retirement they are planning for, when they need it, without placing unnecessary pressure on the farm?
… and remember:
“Don’t simply retire from something; have something to retire to.” — Harry Emerson Fosdick