How is the next generation ever supposed to step up if the current generation can’t step down or at least step aside? The short answer is they can’t. It’s one reason managerial authority on many ranches skips a generation. More calamitous, it’s a major reason why young people don’t stay in ranching and multi-generational ranches are disappearing.
If you want be happy in your later life, be financially secure and keep your ranch in the family, there are three pieces to the retirement puzzle you need to put in place.
- What will you retire to?
For most ranchers the boundary between work life and family life is somewhere between blurry and non-existent. As a result, what you do becomes who you are. When what you do is who you are, who are you when you stop doing? That’s an important question, and it is one reason why retiring from ranching is so difficult. RMC founder, Stan Parsons, once told me, “You can’t retire from ranching.” Then he added, “You can’t retire from anything. You need to retire to something.” After being active all your life, it isn’t a reasonable expectation to work to the day you retire and suddenly do nothing.You don’t find that purpose after you retire. It should be developed much earlier so that rather than stepping down from your role on the ranch, you are stepping into a something that keeps you intellectually, emotionally and spiritually engaged.
- What role will you have in the business?
It isn’t realistic to expect the current generation to completely sever ties with something they’ve devoted their life to. And it would be an unhealthy blow for the incoming generation to lose the accumulated wisdom of their predecessors. The question is what is the appropriate role for the retiring generation? The outgoing generation has experience that can be invaluable to the next generation. The tuition for the school of hard knocks is high, and while people need to make some mistakes, it would be nice if they didn’t have to repeat every single one the preceding generation made. If it were me, I’d want the outgoing generation to support me as an advisor. If I’m stepping aside for a new generation of management, I hope I’d share with them my insights but realize that they must make the decisions they think are in the best interest of the business. I hope I’d be able to honor that and at the end of the day, ride for the brand.Whatever the role, I suggest you make it flexible and meaningful. The outgoing generation has paid their dues and deserves to be able to get away when they want. It should also be something that makes a real contribution (assuming they still want to contribute).
- How much money will you need?
A lot of ranchers plow every penny they ever make back into the ranch. That makes them dependent on the ranch and who ever is running it for their income in retirement. We should be plowing some of our profit into off-ranch retirement investments that will provide income when we step back from operations. Not making enough of a profit to invest off-ranch? Well then, it’s high time you came to the Ranching For Profit School.
