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10 Years of Annie’s Project: Personal Finance in Succession Planning
Barbara O’Neill, Ph.D., CFP®, Distinguished Professor Emeritus, Rutgers Cooperative Extension
https://www.moneytalkbmo.com/
1. Hold Family Conversations: Discuss openly your hopes, fears, and various succession planning
options (e.g., buyout valuation, gifting) with successor(s), heir(s), and surrogates (e.g., executor).
2. Contact Financial and Legal Advisors: Discuss family wishes and tax-saving estate planning
strategies (e.g., gifts of equipment or shares of farm ownership) and prepare relevant legal documents.
3. Establish Personal Retirement Savings Accounts: Save for retirement in a Roth and/or Traditional
IRA, SEP-IRA, and taxable accounts to have multiple streams of retirement income besides the farm.
Another good source of retirement savings is employer savings plans; e.g. 401(k)s from off-farm jobs.
4. Set SMART Goals for the Future: Include a date, a dollar cost, and an action plan so goals are
Specific. Measurable. Achievable. Realistic. Time-Related. Use the template to craft a SMART Goal.
5. Annually Update Financial Statements: Update cash flow statement (income minus expenses) and
net worth statement (assets minus debts) annually to monitor financial progress. Special net worth
calculation forms are available for farm families that include the value of farm assets and debts.
6. Diversify Your Investments: Create asset allocation weights (e.g., 45% stock, 25% bonds, 20% real
estate, 10% cash equivalent assets) based on age, investment risk tolerance, and investing experience.
7. “Bucket” Your Retirement Savings: Separate savings into three “buckets” based on when you will
draw them down. Bucket 1: first 1-2 years, Bucket 2: years 2 to 10/15, Bucket 3: 10/15+ years away.
8. Purchase Adequate Insurance: Contact your local SHIP office for assistance with selecting a
Medicare supplement policy and/or long-term care insurance. Also consider umbrella liability coverage.
9. Check Out RCE Resources: Visit the RCE Personal Finance website and review these resources:
Spending Plan Worksheet, Net Worth Calculation Worksheet, Beneficiary and Personal Representative
Designations, Digital Assets Inventory Worksheet, and Financial Goal-Setting Worksheet.
10. Review the RCE Later Life Farming Course: Listen to the videos of a 2015 RCE conference on farm
succession planning and review one or more of the ten Later Life Farming modules.

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Annie's Project Personal Finance in Succession Planning Outline

  • 1. 10 Years of Annie’s Project: Personal Finance in Succession Planning Barbara O’Neill, Ph.D., CFP®, Distinguished Professor Emeritus, Rutgers Cooperative Extension https://www.moneytalkbmo.com/ 1. Hold Family Conversations: Discuss openly your hopes, fears, and various succession planning options (e.g., buyout valuation, gifting) with successor(s), heir(s), and surrogates (e.g., executor). 2. Contact Financial and Legal Advisors: Discuss family wishes and tax-saving estate planning strategies (e.g., gifts of equipment or shares of farm ownership) and prepare relevant legal documents. 3. Establish Personal Retirement Savings Accounts: Save for retirement in a Roth and/or Traditional IRA, SEP-IRA, and taxable accounts to have multiple streams of retirement income besides the farm. Another good source of retirement savings is employer savings plans; e.g. 401(k)s from off-farm jobs. 4. Set SMART Goals for the Future: Include a date, a dollar cost, and an action plan so goals are Specific. Measurable. Achievable. Realistic. Time-Related. Use the template to craft a SMART Goal. 5. Annually Update Financial Statements: Update cash flow statement (income minus expenses) and net worth statement (assets minus debts) annually to monitor financial progress. Special net worth calculation forms are available for farm families that include the value of farm assets and debts. 6. Diversify Your Investments: Create asset allocation weights (e.g., 45% stock, 25% bonds, 20% real estate, 10% cash equivalent assets) based on age, investment risk tolerance, and investing experience. 7. “Bucket” Your Retirement Savings: Separate savings into three “buckets” based on when you will draw them down. Bucket 1: first 1-2 years, Bucket 2: years 2 to 10/15, Bucket 3: 10/15+ years away. 8. Purchase Adequate Insurance: Contact your local SHIP office for assistance with selecting a Medicare supplement policy and/or long-term care insurance. Also consider umbrella liability coverage. 9. Check Out RCE Resources: Visit the RCE Personal Finance website and review these resources: Spending Plan Worksheet, Net Worth Calculation Worksheet, Beneficiary and Personal Representative Designations, Digital Assets Inventory Worksheet, and Financial Goal-Setting Worksheet. 10. Review the RCE Later Life Farming Course: Listen to the videos of a 2015 RCE conference on farm succession planning and review one or more of the ten Later Life Farming modules.