Yankee Member Savings Plan

by Dean W. Moreau, president and CEO, Yankee Farm Credit

In 1999, Yankee retired member stock from 3 percent down to 2.5 percent. Members received their checks by September 30, 1999.

We retired stock early this year to avoid any possible January 1, 2000 problems. Going forward we will stick with the September stock retirement/allocated surplus revolvement cycle. That means an April-September program for you to receive checks from Yankee. Two checks a year, roughly six months apart:

• April: cash patronage check
• September: stock retirement/allocated surplus check

"I've said it before and I will commit to it again count on 1 percent of your average loan balance refunded to you each year in cash!

I’ve said it before and I will commit to it again — count on 1 percent of your average loan balance refunded to you each year in cash! For a $75,000 customer that’s $750. If you are a $100,000 customer it’s $1,000. Have a $250,000 average loan balance and that’s $2,500 cash back each year!

Invest “off the farm”!

Clearly there is no end to the beneficial ways you might spend the money. My advice, however, especially for our young farmer members, is to invest our refunds “off the farm.” Make Yankee your partner in a disciplined, semiannual, long-term savings plan. While $750, or $1,000 or even $2,500 in savings each year might not seem like much, look at what happens after 30 years with the power of compounding on your side.

Hard to believe, but true

Let’s look at a specific example. A young 35-year-old farmer member who maintains an average $100,000 loan balance for 30 years, can build a $270,292 retirement nest egg solely from investing Yankee refunds at 12%. Just think of what you can do if we are 50/50 partners in funding your retirement. You match fund our checks every six months into a tax deferred investment vehicle and you can double all the 30-year ending values that you see in the chart!

The Yankee Member Savings Plan

As farmers, it is difficult for you to invest some of your earnings off the farm. We understand that, and want to help. Take your future Yankee checks and deposit them into an account with a high quality, low-cost investment manager. Thirty years from now you’ll be glad you did.


This letter appeared in a recent issue of Financial Partner (F.P.) magazine, Yankee Farm Credit's customer publication. Click here if you would like to start receiving F.P. magazine in the mail.

© 1999-2005 Yankee Farm Credit, ACA. All rights reserved.