Start the Year Calm

Week 1: Start the Year Calm

If retirement is getting closer, the start of the year is a good time to slow things down rather than rush decisions.

Many people feel pressure to “do something” early in the year.  In practice, better outcomes usually come from removing pressure first.

This week is about three simple checks that help create clarity and reduce stress before any major decisions are made.

Cash buffer

A cash buffer is money that is easy to access.

• Its role is not performance.
• Its role is flexibility.

When unexpected expenses arise, or income changes temporarily, a cash buffer helps you avoid selling long-term investments at the wrong time.

For many people approaching retirement, a useful starting point is around three to six months of core living costs held in readily available funds.

This is not exciting.  That is exactly why it works.

• It buys time.
• It creates breathing room.
• And it allows decisions to be made calmly rather than reactively.

Risk profile, not labels

Most people’s risk profile does not change very much over time.  What often changes instead is the label attached to the investment.

Terms like balanced or growth sound meaningful, but they do not explain how much risk is actually being taken.  Two investments with the same label can behave very differently.

The more important question is whether your investment approach aligns with how you personally experience risk.

For example, when markets fall, are you comfortable staying the course?  Or does uncertainty create pressure to change strategy at the wrong time?

When risk and behaviour are aligned, decisions tend to feel steadier and more deliberate.  When they are not, even well-designed portfolios can become a source of stress.

One-page clarity

A one-page overview can dramatically reduce mental load.

Not a full financial plan.
Just one page that captures what matters most.

That page answers three questions:

• What do I spend each month?

• What do I own and owe?

• What are the next two decisions I need to make this year?

For example, those two decisions might be things like:

• When do I actually want work to reduce?
• What level of spending do I want my assets to support when that happens, and what return is required to fund that over my lifetime? and
• Does my risk tolerance allow for that return over a lifetime?

When people identify just two decisions like this, everything else becomes easier to sequence.

It separates what needs thought from what can wait, and removes the sense that everything must be solved at once.

Dunbar House Financial Services Pty Ltd (ABN 28 079 653 768, AFSL 284901) trading as Andrew Rowan Wealth Management provides general information only. The content in this communication (including on websites, social media, email, blogs, videos, and other marketing materials) is general in nature and does not take into account your personal objectives, financial situation or needs. Andrew Rowan Wealth Management

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