16—Lancaster Farming,
Saturday, March 23,1968
Farm Retirement
Plan Available
An improved income-tax-de
ferred retirement program is
now available to farmers and
other self-employed persons.'
says W. T. McAllister, extension
farm management specialist at
the. University of Delaware.
Starting this year, self-employ
ed persons can set aside up to
10 percent of their taxable in
come, or $2500, whichever is
smaller.
Basically, the new law is de
signed to give the self-employed
the opportunity to build a re
tirement program with tax-free
income similar to retirement
plans now enjoyed by employed
persons.
Dollars put into the retirement
program are not actually tax
free, explains McAllister. Tax
is merely deferred until retire
ment. The taxes are paid when
the money is withdrawn as in
come during the retirement
years.
This law has a good deal of
merit for farmers, says McAl
lister. However, they will want
to study it closely before com
mitting themselves to any long
term retirement program
Principal advantages of the
program are that it prox ides
systematic savings to supple
ment Social Security and other
retirement income - it also pro
vides the opportunity to delay
taxes on money in the retire
ment fund until after retire
ment. “In reality, this is like
taking money from one pocket
and transferring it to the oth
er,” he says “But in the proc
ess, a tax saving results ”
Farmers who elect to begin a
retirement program must in
clude employees who have work
ed for them three years or long
er. Payments based on their in
come must be the same percent
age which the farmer contrib
utes to his own fund. An em
ployee who works at least 20
hours a week for five months
during a calendar year is con
sidered as having worked a
year.
Money contributed to retire
ment plans must be put into cer
tain types of investments and
the overall plan must be ap
proved by the Internal Revenue
Service Invested funds may not
be used as collateral and once
the program is established, it
must be continued Failure to
continue an established retire
ment program may result in
heavy penalties.
For farmers, the major con
sideration is whether tax de
ferred privilege plus income
earned through investment in
the retirement program is great
er than earnings resulting from
putting the money to profitable
use in the farm business, says
McAllister.
“Before you do anything, dis
cuss the retirement plan with
your insurance agent, stock
broker or bank trust officer,”
he advises. “There are a num
ber of details and options that
should be considered, but don’t
ignore the idea just because it
may seem complicated ”
FARMERS ARE CONSUMERS
Farmers and their families
are consumers in their own
right Like all consumers, they
supply strength to the economy
through the purchase of house
hold furnishings and appliances,
clothes, insurance, medical care
and legal services, to mention a
few. And they're heavy users of
their own products, spending
RAY and LOIS HARBOLD
On Tie Splendid Record of their Cow
FOBES MARIE HARTOG
Here's the Record - Look How She's Come Up Over the Years
The HarbolcTs Management and Miller & Bushong’s Green
Pastures # 503 coarse textured dairy ration is a combination
which gets results.
sMsmm
f**
Start of
Lactation Period
Lifetime to date
Dairy Program
and "Finest Service Anywhere"
For A Profitable
TO
OF MT. JOY, R. D. #l, PA.
Lbs. of
Milk
10,489
11,118
14,543
18,060'
21,885
25,269
101,364 M
MILLER &
BUSHONG, Inc.
Percent
3.6
3.7
3.8
3.8.
3.9
4.0
3,902 -
JUST CALL
717-392-2145
Rohrerstown, Pa.
Lbs. Fat
379
416
550
695
851
1,011