Windsor Wealth Management LLC

Investment service in Topsfield, Massachusetts

Financial Planning

Mid-Year Review: Small life changes can have big financial impacts

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Welcome to summer!

Longer days, warmer weather and a fresh mid-year perspective.

June is the perfect time to take stock of what’s changed in your life, and what might be just around the corner.

Even small life shifts can carry big financial implications, which is why a mid-year review can be so valuable.

What’s changed in your world?

Today’s discussion includes:

  • Reviewing your life changes that may warrant a financial plan update.
  • A checklist to help stretch your retirement income.
  • Tips for backing up and protecting essential documents.

Mid-Year Review: What’s changed?

Life can throw us curveballs and priorities can shift, so let’s make sure your financial plan is still aligned with what you want to achieve.

Give us a call if any of the following applies to you:

Job or Income Changes: A new role, early-retirement offer, added income stream, selling a business? These changes typically affect taxes, benefits (e.g., Medicare IRMAA penalty) and investing strategies. There are, however, financial moves we can often make to offset downside ramifications.

[Related Resource]: Planning Your Final Days of Work Before Retiring

Family Milestones: Marriage, divorce, birth, death, aging parents or adult children with new special needs may require estate or insurance updates.

Health: A recent diagnosis or nearing age 65? Let’s make sure your healthcare plans are in place. Also, if you want to learn more about long-term care insurance, contact us. We’re happy to discuss the pros, cons and costs. Keep in mind, we don’t sell insurance. However, we have long-standing relationships with insurance specialists.

Large Purchases, Sales or Windfalls: Selling a home, funding college or receiving an inheritance? Planning ahead can help reduce financial surprises.

Retirement Approaching: If retirement is just a few years away, it’s time to solidify your plans. A smart Social Security strategy and a well-timed savings withdrawal plan can often extend the life of your retirement funds. We’ll also help you establish a two-to-four-year financial safety net and structure your withdrawals to minimize taxes. For a closer look at our approach, check out: How To Spend Confidently & Without Regret in Retirement.

Prolonging Retirement Income (Checklist)

Whether you’re already retired or planning to be soon, this checklist can help you identify steps that may extend your savings. It’s a great resource to review annually.

[Download the checklist]

Are Your Essential Documents Backed Up and Safe?

If there were a house fire tomorrow, would you have what you need? A simple fire-safe box can help you protect the basics, including:

  • Birth Certificates
  • Digital Account Logins
  • Emergency Contact List
  • Estate Documents
  • Home Inventory Photos/Video (for insurance claims)
  • IDs & Passports
  • Insurance Policies
  • Key Warranties (e.g., new roof, solar panels, windows, etc.)
  • Loan Documents
  • Social Security Cards
  • Spare Emergency Cash
  • Vehicle Titles

Digital Vault

Our clients have access to a secure digital vault.

It’s a private, encrypted space where you can store digital copies of key documents, including those listed above but also scans of: credit cards, divorce decrees, marriage certificates, property records and more. The vault is accessible anytime, from anywhere, securely.

Fire-Safe Boxes for Important Items

To help protect your important documents, look for a fire-safe box with a UL 72 or ETL certification, a 120-minute fire rating and water resistance.

Underwriters Laboratories (UL) and Electrical Testing Laboratories (ETL) are Nationally Recognized Testing Laboratories. They independently test products to stringent safety and performance standards.1

Important: Your protection-rating needs may vary. For example, if you’re looking for a safe that protects digital media or is burglary resistant, these require different UL classes.

American Security has some helpful articles regarding safes, including Why Safe Ratings Matter.2

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

Sources:

1: Osha.gov, Current List of NRTLs: https://www.osha.gov/nationally-recognized-testing-laboratory-program/current-list-of-nrtls

2: American Security, Why Safe Ratings Matter: https://americansecuritysafes.com/why-safe-ratings-matter

Planning Your Final Days of Work Before Retiring

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The Calm After the Work Is Do

Today, we:

  • Discuss eight actions to take before you give retirement notice to your employer.
  • Provide a detailed checklist of essential pre-retirement tasks.

As you start thinking seriously about your final days of work before retirement—whether that’s at age 62, 67 or another time—there are a few key actions that help things go more smoothly.

Now, let’s look at eight actions to take before your last day of work:

#1—Retire to Something, Not Just from Work

Retirement isn’t just about leaving your job.

It’s about building a life you want to live. Whether that means a part-time job, volunteering, spending time with the grandkids or finally joining “that” gym—it’s important to have a purpose.

Beyond what you’ll be “doing” in retirement, it’s equally important to understand how you might feel and how your health could be impacted by this major transition.

Quick Tip by Dave Bunker, Watch the Video Now >

#2—Understand the Emotional Shift and Health Impact

The first year of retirement can bring a surprising health risk: stress-related heart issues spike.

The transition from earning and saving to drawing down what you’ve built is a big emotional adjustment.

Background:

Harvard School of Public Health researchers looked at rates of heart attack and stroke among men and women in the U.S. Health and Retirement Study. Among 5,422 participants, those who had retired were 40% more likely to have had a heart attack or stroke than those who were still working.1

The increase was more pronounced during the first year after retirement, before leveling off. Overall, research on retirement’s health effects is mixed.2

Our Recommendation…

Retirement isn’t a one-time event; rather, it’s a transition.

Many retirees experience changes in identity, routine and social connection. That’s why it’s important to prepare not just financially, but emotionally as well.

To better understand the emotional journey, check out this helpful TED Talk: 4 Phases of Retirement…and the Psychological Challenges.3 The four phases include: Vacation, Feeling Lost, Trial and Error, and Reinvent and Rewire.

#3—Clean Up and Consolidate Your Financial Life

Now is the time to tidy up your financial accounts, including:

  • Review and possibly consolidate old 401(k)s or other workplace plans into an IRA. While some 401(k)s are worth keeping, IRAs usually offer more flexible withdrawal options and simplify things for your heirs.
  • Open any needed accounts before your final day to avoid delays. For instance, give us a call about a month before you retire so we can help you set up the IRA account you’ll use to roll over your 401(k), 403(b) or similar.
  • If you’re receiving a pension, let’s analyze your options (lump sum vs. monthly annuity, single life vs. joint life, etc.) using our Income Lab modeling tool. Keep in mind, most pension decisions need to be made at least 60 days before retirement. Also, if you’re taking a lump sum, put it into an IRA. If you leave it in your brokerage, you’ll pay taxes on ordinary income. 

TIP: If you’re receiving a bonus or cashing out unused vacation time, it may impact your taxes or final 401(k) contributions. Therefore, timing your retirement date matters. Also, hold off rolling over your 401(k) into your IRA until your final contribution, unused vacation time, bonus, etc. hit.

#4—Secure Healthcare Coverage

Are you eligible for Medicare (typically at age 65)? Or will you need COBRA or private insurance? Will you want Medicare Advantage?

While pondering the latter, you’ll also want to revisit your healthcare proxy, powers of attorney and estate documents.

Important: If you’re 63 or older, let’s analyze your income to avoid triggering IRMAA surcharges (Income Related Monthly Adjustment Amount) on Medicare premiums. Being just one dollar over can cost you thousands.4

Free Medicare Counseling Resources:

#5—Plan Your Retirement Paycheck

We’ll help you set up a retirement income stream that feels like a paycheck.

Resource: Read our detailed blog post about how we help you create your monthly retirement paycheck.9

#6—Watch for Tax Triggers & Withholdings

Be sure to double-check your tax withholding rates for Social Security and pension income. Common options include 7%, 10%, 12%, 22% and higher.

Many retirees forget to set withholdings on these payments, which can lead to surprises at tax time. Alternatively, you can opt to pay quarterly estimated taxes.

As a general rule, use a 20% withholding rate as a starting point. It may need adjusting, but it offers a solid baseline.

Remember, while you’ll no longer pay into Social Security or Medicare, you’ll still owe taxes on retirement income.

Finally, if you’ve had a one-time income event, it’s important we run a tax analysis together.

For Example:

If your total income was $200,000, but $80,000 came from a one-time bonus, we’ll want to explore whether that bonus can be excluded when calculating your Medicare IRMAA.

Lastly, consider if there is anything else you should be doing right now, e.g., taking capital gains.

#7—Decide What Insurance to Keep (and What to Let Go)

As your needs change, it’s smart to review any life or long-term care insurance policies.

Key questions to ask yourself include:

  • Is your life insurance portable?
  • Do you still need it?
  • Should we evaluate or add long-term care coverage?

#8—Finalize Your Budget

A budget is a living, breathing document; it’s never truly final. Still, it’s important to think about how your spending patterns will shift in retirement.

For example, retirement may mean:

  • Less spending on commuting, work clothes or lunches out, but more on travel, healthcare, hobbies or RV maintenance.
  • Mortgage payments disappearing, but insurance or family support costs rising.
  • Savings on payroll taxes, but higher utility bills from being home more.
  • Dropping life insurance premiums, but adding Medicare costs, prescriptions or home repairs.

Resource: Download our handy budgeting worksheet.10

Understanding these trade-offs now helps set realistic expectations and keeps your retirement income plan on track.

RESOURCE: Retiring Checklist

To help you think through additional retirement considerations, here’s a detailed checklist: What issues should I consider before I retire?11

Within the above checklist are links to other checklists and flowcharts that help answer the following questions:

  • Will I Avoid IRMAA Surcharges on Medicare Part B & Part D?
  • What Issues Should I Consider When Purchasing Long-Term Care Insurance?
  • Should I Consider Doing A Roth Conversion?
  • What Issues Should I Consider When Establishing My Charitable Giving Strategy?
  • What Issues Should I Consider Before I Update My Estate Plan?
  • Am I Eligible for Social Security Benefits If I Have Been Divorced?
  • Am I Eligible For Social Security Benefits As A Surviving Spouse?
  • Can I Make A Deductible Contribution To My HSA?

Next Steps

If you’d like an updated look at your retirement income and tax projections, give us a call. We’re happy to revisit the numbers as often as you need, regardless of how close or far off your retirement may be.

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

Sources:

1: Harvard Health Blog, Is retirement good for health or bad for it? https://www.health.harvard.edu/blog/is-retirement-good-for-health-or-bad-for-it-201212105625

2: National Library of Medicine, Transition to retirement and risk of cardiovascular disease: Prospective analysis of the US Health and Retirement Study https://pmc.ncbi.nlm.nih.gov/articles/PMC3367095/

3: TED: 4 Phases of Retirement…and the Psychological Challenges, https://www.ted.com/talks/dr_riley_moynes_the_4_phases_of_retirement

4: Northern Trust, Avoiding the IRMAA Cliffs, https://www.northerntrust.com/united-states/institute/articles/avoiding-the-irmaa-cliffs

5: Mass.gov, Serving the Health Insurance Needs of Everyone (SHINE) Program, https://www.mass.gov/info-details/serving-the-health-insurance-needs-of-everyone-shine-program

6: New Hampshire DHHS, Aging and Disability Resource Centers, https://www.dhhs.nh.gov/programs-services/adult-aging-care/aging-and-disability-resource-centers

7: Fidelity, We are Fidelity Medicare Services, https://medicare.fidelity.com/about-us/

8: Fidelity, Learn about Medicare, https://medicare.fidelity.com/learning-center/

9: Windsor Wealth Management, How To Spend Confidently & Without Regret in Retirement, https://windsorwm.com/how-to-spend-confidently-without-regret-in-retirement/

10: Windsor Wealth Management, Budgeting Worksheet, https://windsorwm.com/wp-content/uploads/2023/10/Budget-Worksheet.xlsx

11: Windsor Wealth Management, What Issues Should I Consider Before I Retirement, https://windsorwm.com/wp-content/uploads/2025/05/What-Issues-Should-I-Consider-Before-I-Retire-2025.pdf

Home Energy Audits and Energy Tax Credits

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Is your home leaking money?

Wealth isn’t just about accumulation; it’s about being intentional with your resources.

Optimizing your home’s energy efficiency is a prime example.

Just as we seek to help maximize your financial returns, you can maximize your home’s comfort and value, while also leveraging energy credits to lower your taxes.

Are your cooling and heating systems energy efficient?

Our goal today, is to help you:

– Discover hidden savings via a professional home energy audit.

– Reduce taxes by leveraging energy credits.

– Understand two key 2025 energy tax credit changes.

– Increase awareness of energy-efficiency scams.

Useful Home Energy Audits

A good energy audit includes a detailed report of where your home is losing energy, and what you can do to fix it.  

The first step, is finding a certified energy auditor. Specifically, a professional who’ll provide you unbiased information and isn’t selling products.

Finding a Reputable Auditor

The U.S. Department of Energy recognizes about 10 home energy auditor qualified certification programs for the Energy Efficient Home Improvement Credit.

To find certified professionals near you, try the Building Performance Institute (BPI) locator. Keep in mind, BPI is just one locator option.

Ideally, select an auditor that doesn’t perform repairs. This helps ensure less bias results.

Related…

Mass Save® is a collaboration of Massachusetts utilities that offer home energy assessments (at no cost), rebates and incentives to help you reduce your energy costs.

Incentive Example:

The Mass Save HEAT Loan offers 0% financing for eligible energy-efficient upgrades. Starting January 1, 2025, you can finance up to $25,000. The financing covers a range of improvements, including insulation, heat pumps, batteries and more.

Most states offer energy-efficiency programs, supported by state, utility and federal incentives, including New Hampshire.

Therefore, before upgrading any cooling or heating system, or replacing any appliance, be sure to check for available rebates and incentives.

Pinpointing where your home loses the most energy will help you prioritize repairs and maximize IRS home energy credits.

Resource: Here’s a helpful chart listing what to expect an auditor to have for tools, (e.g., combustion analyzer, infrared camera, digital probe thermometer, etc.) and what the audit entails.

Finally, watch out for unsolicited “free” energy audit offers. Some companies use these to push you into buying things you don’t need. Always double check who the auditor works for and get a few different opinions before agreeing to any work or signing on the dotted line.

Home Energy Tax Credits & Key 2025 Changes

The Energy Efficient Home Improvement Credit is available for qualifying home improvements made from January 1, 2023 through 2032. To qualify for these credits, generally the improvements must be for your primary residence and use only new materials and systems.

2 Key Changes:

There have been two key changes to the program starting in 2025, including:

#1—Energy-efficient products eligible for the credit need to be manufactured by “qualified” manufacturers.

The IRS is establishing a program to certify manufacturers whose products meet specific energy efficiency standards. This requirement helps ensure the products receiving tax credits are genuinely contributing to energy savings.

#2—When claiming the credit, you must provide the Product Identification Number (PIN) for the qualifying items on your tax return.

Basically, the PIN is a unique ID the IRS uses to ensure the product meets standards, comes from a legit company and matches your credit claim.

Watch Out for Energy-Efficiency Scams

The number of U.S. solar installations is expected to double by 2030, according to the Solar Energy Industries Association®.

Therefore, it’s not surprising we’re seeing increases in solar scams.

The U.S. Treasury describes popular solar scams in their article, Consumer Solar Awareness. (It also talks about buying vs. leasing solar power systems.)

The article highlights several scam tactics, including:

– Sales pitches saying, “This is a government program” to make you think a solar installation is free or government-endorsed.

– Promises of free solar panels and limited-time offers and other pressure tactics urging you to sign up without examining the details.

– Promises of tax credits even though you owe no taxes or promises that the government will send you a tax rebate check in the mail.

Overall, solar panels may be a good option to lower your energy costs, but take your time when evaluating your options.

Buyer Beware: In general, if something is unsolicited, creates a sense of urgency, demands immediate or unusual payment, or sounds too good to be true—assume it’s a scam.

[Related]: Since the weather is getting warmer, watch out for paving scams.

Helpful Tips: No matter if you’re buying a new home or an appliance, be sure to look for the Energy Star mark. Keep in mind, the Energy Star isn’t always the only requirement for tax credits. But, it’s a good indicator of energy efficiency and, therefore, a good place to start.

Finally, don’t forget about Consumer Reports, a nonprofit organization that provides unbiased testing and ratings of products and services, (e.g., new A/C, refrigerator, smart thermostat, etc.). You can often access their reports online for free with most library memberships.

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

Bay Colony Advisors, DBA Windsor Wealth Management, is not a Certified Public Accountant and does not provide tax, legal, or accounting advice. Any tax-related information provided is for general informational purposes only and should not be construed as legal or tax advice. Each individual’s tax situation is unique, and you should consult with your own tax, financial, or legal advisors before making any decisions. We strongly recommend seeking the advice of a qualified CPA or other professional for personalized tax advice.

How To Spend Confidently & Without Regret in Retirement

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Let’s challenge conventional wealth accumulation wisdom…

Our team recently read the book, Die With Zero: Getting All You Can From Your Money by Bill Perkins. It’s an easy-to-read personal finance book that challenges current retirement norms.

(We have extra copies—feel free to stop by and pick one up. We’d love to meet you!)

Creating memories or leaving an inheritance: when is the right time to give?

Today, we discuss how to:

  • Get all you can from your money, (i.e., highlight ideas from the book Die With Zero).
  • Spend confidently and without regret in retirement.
  • Decide the right time to give—now or later—using sophisticated money modeling.

Get All You Can From Your Money

Bill Perkins’ “Die With Zero” overall argument is:

When preparing for retirement, people often save too much and spend too little, ultimately missing out on meaningful life experiences.

Perkins argues money should be spent strategically for fulfillment, not just left behind.

Before going any further, let’s be clear…

We’re not encouraging you to be financially irresponsible. Absolutely not!

But, Perkins is definitely onto something—especially when you combine his ideas with strategic financial planning.

Here are some of his key points:

Maximize Life Experiences: Instead of focusing solely on accumulating wealth for retirement or your heirs, think about how you can use your money to create meaningful experiences while you’re able to enjoy them.

Time-Bucket Your Life: Your life has different stages, and each one comes with unique opportunities. Be intentional about how you allocate your money so you can make the most of every phase—especially while you’re healthy.

Invest in Experiences Early: The best time to create lasting memories isn’t “someday”—it’s now. Enjoying experiences earlier in life helps you feel more fulfilled.

Avoid Over Saving: Too many people work longer than they need to and save more than they’ll ever spend. The result? They leave behind wealth they never got to enjoy themselves.

Optimize Giving: If you plan to leave money to loved ones or charities, consider giving earlier rather than waiting until after you’re gone. Your generosity could have a much bigger impact now.

[Related Blog Post]: One of the best times to use Qualified Charitable Distributions (QCDs) is early in the year. Learn why in our post, 2025 Tax Planning Resources & Key Financial Data Spreadsheet.

Plan for a Declining Health Curve: Your ability to travel, explore and be active won’t last forever. That’s why it’s important to strike a balance between financial security and truly living while you can.

Perkins’ ideas sound reasonable. In reality, though, most require detailed financial planning.

This is where we come in…

Spend Confidently and Without Regret in Retirement

Many retirees worry about spending their money, i.e., What if the market takes a downturn? What if I outlive my savings?

While these concerns are natural, a well-structured financial plan helps you be intentional with your spending and feel secure knowing your money will outlive you.

Our role is to guide you through this process with a clear four-step approach:

Step #1—Determine Your Retirement Spending Capacity & Create a Tax-Efficient Withdrawal Plan

Everyone’s financial situation is unique, with different levels of savings, income sources and comfort with risk. We take a personalized approach to managing your investments—balancing growth with stability while ensuring you can spend confidently in retirement.

A key part of this strategy is minimizing taxes on your withdrawals so you keep more of what you’ve saved. We do this by carefully selecting which accounts to withdraw from first—whether taxable, tax-deferred or tax-free—based on your income needs and current tax rates.

This approach helps extend the life of your portfolio, allowing your investments to continue growing even as you draw from them.

Overall, it’s our job to tell you how much you can afford to spend in retirement. A primary tool we use to help you is advanced software (aka Income Lab) that includes sophisticated money modeling guardrails.

Resource: We discussed money modeling guardrails in a recent post: 3 Steps To Help Your Money Outlive—You.

Step #2—Create a Monthly Paycheck for You

One of the biggest adjustments in retirement is transitioning from a regular paycheck to drawing from multiple income sources.

Most of our clients rely on a mix of Social Security, pensions, part-time work and investment withdrawals for their retirement income.

Some also have additional income streams, e.g., rental properties, royalties, payments from seller financing, etc.

Understanding how these income sources interact is essential for confident retirement spending.

That’s why we focus on transforming your various income streams into a tax-efficient monthly paycheck.

Simple Example:

Imagine your annual withdrawal plan from investments is $84,000 (excluding Social Security, pensions and other income sources). Each month on the 15th, we’ll deposit $7,000 from your investment portfolio into your checking account, ensuring you receive a steady stream of income.

This way, you can enjoy a sense of stability, knowing a $7,000 “paycheck” will arrive in your account every month.

Step #3—Put Aside Two-to-Four Years of Safety Net

To help ensure you can weather market fluctuations without disrupting your lifestyle, we set aside two-to-four years’ worth of income needs in a conservative investment account (that still grows).

For example, if you plan to spend $84,000 per year, we earmark $252,000 to cover the first three years of retirement.

This portion of your portfolio is stable, meaning that even if the market declines, your ability to meet your spending needs remain intact. Meanwhile, the rest of your investments continue growing for the future.

Step #4—Perform Annual Audits & Make Smart Adjustments

Each year, we reassess your portfolio balance versus your spending and market conditions.

If the market performed well, we “refill” the amount spent from the safety net.

However, if the market had a down year, we hold off on refilling and use the second year’s reserve instead.

Since market recoveries typically take six to 18 months, this approach helps protect your long-term investments.

Audit: Keeping Spending on Track

As part of the audit, we discuss your spending target. Again, let’s say it’s $84,000. If you end up spending more, perhaps $98,000, it may not be an issue if the market was strong. However, if higher spending becomes a pattern, we’ll flag it and have a conversation about sustainability.

Retirement should be about enjoying life, not worrying about money.

By following a plan that balances stability with flexibility, you can confidently spend with the knowledge that your financial future is secure.

Decide the Right Time to Give—Now or Later

Imagine sharing your wealth with loved ones now—without stressing about your future finances.

How does Windsor Wealth Management help you decide whether to give money now (especially if your loved ones could really use it), or wait?

We typically present two scenarios:

Scenario One: You hold onto your money and pass it on after you’re gone.

Scenario Two: You gift, say, $5,000 to each grandchild now and see the impact on your financial plan.

Most of the time, the effect from early giving is minimal.

Using our real-time software modeling, we run the numbers so you can see the difference.

For example, perhaps instead of spending $12,000 per month, you adjust to $11,500.

This way, you can give—now—with confidence.

Final Thoughts

Bill Perkins offers some good insights, encouraging people to make the most of their wealth during their lifetime.

Keep in mind, his perspective comes from the lens of a successful (and wealthy) hedge fund manager and entrepreneur.

Ultimately, as with all things in life, balance is key—enjoying your wealth while ensuring financial security for the long run.

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

Catch-Up Contributions: How $1,000 May Elevate Retirement

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Retirement planning is all about maximizing your resources, and for those 50 and older, catch-up contributions offer a meaningful opportunity to do just that.

The following two charts illustrate how adding $1,000 annually to your retirement savings (the catch-up amount) can grow to an additional $21,551 by age 67, assuming a 7% annual return.

Chart A (no catch-up)

Chart B (includes $1,000 catch-up contribution)

Source: Windsor Wealth Management, Chart A: Initial Balance $2,000,000, Annual Limit $7,000 at 7% annual return. Chart B: Initial Balance $2,000,000, Annual Limit $7,000 + $1,000 Catch-Up at 7% annual return.

While $21,551 isn’t necessarily a life-altering sum, think about the possibilities that extra cushion could provide in retirement.

For example, maybe you:

  • Boost your living experience, (e.g., add a cozy sunroom for year-round enjoyment).
  • Establish a small scholarship in your family’s name.
  • Fund an annual vacation for the next decade, (e.g., rent a beachfront home to host family reunions).
  • Support family milestones like a grandchild’s education or wedding.

The key takeaway?

Every dollar saved today creates more possibilities for tomorrow.

If you’d like to explore how catch-up contributions fit into your financial strategy, reach out.

PS: In case you missed it, we wrote a detailed post describing 2025 Tax Planning Resources, including a Key Financial Data spreadsheet.

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

2025 Tax Planning Resources & Key Financial Data Spreadsheet

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Happy New Year!

As we kick off a new year, it’s time to turn our attention to the upcoming tax season.

This post is intended as a year-long resource, so keep it handy.

2025-Tax-Planning-Resources

2025 Tax Planning Resources

Today, we discuss:

  • 2025 key financial data, including tax brackets, retirement plan distribution limits, Medicare premiums, standard deductions, child tax credit, and more. (Summarized in an organized spreadsheet.)
  • Changes in the IRS 2025 retirement contribution limits and a new “super” catch-up contribution for those aged 60-63.
  • Using QCDs earlier in the year.
  • The HSA’s triple tax benefits.
  • Why income taxes “may” increase in 2026.

2025 Key Financial Data (Useful Spreadsheet)

Keep this spreadsheet (links to our website) handy throughout the year. (Updated post President Trump signing the One Big Beautiful Bill Act (OBBBA) on July 4, 2025.)

Within it, you’ll find 2025 tax brackets, retirement plan distribution limits, Medicare premiums, standard deductions, child tax and education credits, tax rates for long-term capital gains and qualified dividends, tax on Social Security benefits, and much more.

If you’d like a quality hard copy, let us know. We’re happy to mail one to you or feel free to stop in.

IRS 2025 Contribution Limit Changes & New “Super” Catch-Up Contribution

We encourage maximizing your retirement savings contributions. If you’re unsure how, reach out. Let’s explore strategies to increase your savings.

401(k), 403(b), 457, TSP & SIMPLE IRAs Limits:

General Limit: $23,500 (401(k), etc.)

General Limit SIMPLE IRA: $17,600 (< 26 employees) or $16,500 (> 26 employees)

Age 50+ Catch-Up: $7,500 most plans; $3,500 (SIMPLE IRAs)

Ages 60-63 “Super” Catch-Up: $11,250 most plans; $5,250 (SIMPLE IRAs)

Traditional & Roth IRAs:

General Limit: $7,000

Age 50+ Catch-Up: $1,000

Key Change: The “super” catch-up contribution allows individuals aged 60-63 to increase their retirement savings by contributing more (generally $11,250) to their employer-sponsored retirement plans.

Use QCDs Earlier in the Year

With a Qualified Charitable Distribution (QCD), you can transfer up to $100,000 directly from your IRA to a charity tax-free. It’s often beneficial to take your QCDs before your Required Minimum Distributions (RMDs), since it can lower your taxable income.

Here’s how it works:

RMD: Let’s say your RMD is $20,000.

Donation: You donate $3,000 to charities directly from your IRA.

Deduction: This $3,000 is deducted from your $20,000 RMD.

Taxable Amount: You only pay taxes on the remaining $17,000.

There are other benefits to using QCDs earlier in the year, including avoiding potential delays that can sometimes occur during the busy year-end season.

Also, if you have a charity in mind, making your QCD early in the year provides the charity with the funds sooner, putting your donation to work faster.

Important Note: When using Fidelity for a QCD, you won’t receive a tax form. To claim the tax deduction, you’ll need to inform your tax advisor.

At Windsor Wealth Management, we regularly facilitate QCDs for our clients, and we’re happy to engage with your accountant.

HSA: Triple Tax Benefits

Health Savings Accounts (HSAs), offer several tax benefits to help you save money on health care costs.

Keep in mind, HSAs are only available to individuals enrolled in a high-deductible health plan, have no other health care coverage, and are not enrolled in Medicare or claimed as a dependent.

Here are the triple tax benefits:

#1—Tax-Deductible Contributions: The money you contribute to an HSA is tax-deductible, meaning it reduces your taxable income, which can lead to tax savings in the present.

#2—Tax-Free Growth: Any investment earnings your HSA accumulates grow tax-free, allowing your savings to potentially build up more quickly over time.

#3—Tax-Free Withdrawals: When you use your HSA funds to pay for qualified medical expenses, such as doctor’s visits, prescription drugs or hospital stays, the withdrawals are tax-free.

Also, HSAs have no “use it or lose it” rule. The funds can roll over indefinitely from year to year. (Whereas, unused funds in a Flexible Spending Account (FSA) are typically forfeited at the end of the plan year.)

For 2025, HSA contribution limits are:

Self-only: $4,300

Family: $8,550

Individuals aged 55 and older can make an additional $1,000 catch-up contribution.

Income Taxes May Increase in 2026

The Tax Cuts and Jobs Act (TCJA) is a tax law passed in 2017 that made significant changes to the US tax code.

Many of the individual tax cuts under the TCJA are set to expire at the end of 2025. If Congress doesn’t extend these provisions, income tax rates for many Americans could increase starting in 2026.

Under the TCJA, marginal tax rates are 10%, 12%, 22%, 24%, 32%, 35% and 37%.

If the TCJA expires on 12/31/25, then marginal tax rates will revert to their permanent pre-TCJA levels of 10%, 15%, 25%, 28%, 33%, 35% and 39.6%, according to a Congressional Research Service report.

Want to see how the potential expiration of the TCJA might affect your taxes?

Our software can illustrate the potential tax implications of different income levels.

Contact us if you’d like to see how your tax burden could change under various circumstances.

Quick Look: 2024 Market Performance

In short, 2024 was a great year for the stock market, with the S&P 500 finishing up 25.02% for the year, and 3% in the last quarter.

Communication services and big tech led the way, consistently outperforming the rest of the market, largely due to the rise of artificial intelligence. Compared to 2023, there was broader market participation in 2024, with sectors beyond communication services and big tech contributing more evenly to the market’s growth.

Looking ahead to 2025, company valuations are high, so we may not see as strong a year.

Fidelity does a nice job recapping 2024 in their article, 2024 Stock Market Report. It’s an easy read too.

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

Bay Colony Advisors, DBA Windsor Wealth Management, is not a Certified Public Accountant and does not provide tax, legal, or accounting advice. Any tax-related information provided is for general informational purposes only and should not be construed as legal or tax advice. Each individual’s tax situation is unique, and you should consult with your own tax, financial, or legal advisors before making any decisions. We strongly recommend seeking the advice of a qualified CPA or other professional for personalized tax advice.

What’s the Santa Claus rally phenomenon? 5 Potential Factors

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Ho, Ho, Ho.

The year just isn’t complete without mentioning the Santa Claus rally.

Santa Claus Rally
Photo by Microsoft’s AI Image Creator

Santa Claus Rally

The Santa Claus rally is a stock market seasonal trend; specifically, stocks tend to rise during the last five trading days of December and the first two days of January.

The Santa Claus rally phenomenon is often attributed to several factors, including:

Increased Optimism: Investors are feeling festive.

Vacations: Many institutional investors are on vacation, (i.e., fewer large trades reduce market volatility).

Less Tax Activity: Tax-loss harvesting typically slows down in late December, compared to early December.

Window Dressing: Financial firms may make strategic buys in December to improve the appearance of their portfolios.

Year-End Bonuses: Many individual investors use their year-end bonuses to buy stocks, which can boost market activity and prices.

Will it be a jolly good December for stocks?

Only time will tell!

While we’re waiting, here’s a quick look at the last 26 years:

Santa Claus Rally
Source: Investor’s Business Daily

Related: For more stock market seasonal trends, check out our blog post, Stock Market Seasonality and the September Effect.

Happy Holidays

As the year winds down, I hope you find time to relax and recharge. Reach out anytime.

With gratitude,

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

Economic Update, Investment Moves & Year-End Strategies

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As we approach the Thanksgiving holiday, I want to take a moment to express my sincere gratitude for your continued trust and business.

It’s an honor to work with you and help you achieve your financial goals.

I hope this Thanksgiving season brings you joy, good health and quality time with loved ones.

Economic Factors and Investment Moves
Photo by Debby Hudson, Unsplash

Today, we discuss:

  • Key economic factors, including consumer spending, the October jobs report, inflation and interest rates.
  • Your portfolio and our money moves.
  • Year-end financial actions to take.

Consumer Spending

While consumer spending remains strong, it’s showing signs of slowing.

Overall, consumers are focused on value. They’re trading down (and have been for months), favoring value retailers like Walmart and Marshalls. Many consumers trading down are also buying smaller package sizes and reducing purchase frequency.

Heading into the holiday season, those with higher incomes are sailing right along, however, others with lower incomes are struggling to manage increased costs.

Although wages have risen, inflation has eroded much of the gains, leaving little room for increased purchasing power.

New Jobs Declined Sharply (However)

The Bureau of Labor Statistics reported 12,000 new jobs were added in October, a steep decline from September (223,000 new jobs).

However…

Acting Secretary of Labor Julie Su attributed the decline to “significant impacts from hurricanes and strike activity,” adding that the strike activity (Boeing) reduced employment growth by 41,000 jobs.

The strike disrupted Boeing’s production, which affected its supply chain and other industries. This led to a temporary decline in manufacturing jobs.

Also, many companies didn’t report their job numbers on time, adding to the decline.

Conversely, the unemployment rate held steady at 4.1% in October, unchanged from September. In general, whoever wants a job can find one.

Interest Rates & Inflation

The Fed lowered interest rates again in early November by 0.25%, marking the second rate cut this year. The initial cut of half a percentage point occurred in September.

Inflation is at 2.44%. Last month it was 3.36%. It peaked at 9.1% in June 2022. (The Fed aims for a 2% inflation rate.)

Overall, inflation has cooled. However, prices remain elevated since surging 20-30% over the past several years. The rate of increases has slowed, yet it’s unlikely we’ll return to pre-inflation pricing levels.

Related: Check out our post, Rising Prices: try these saving tips to free up cash.

Client Portfolios & Money Moves

Moderately allocated portfolios are up just over 20% for the past 12 months.

We’ve been taking profits on some investments appreciated by 35% or more, especially those held in tax-advantaged accounts like IRAs. This strategy also helps rebalance your portfolio.

Preparing for December

Many mutual funds distribute capital gains in December, creating a taxable event. Therefore, we may sell some of the mutual fund(s) to avoid capital gains taxes.

To minimize capital gains taxes, we prefer Exchange Traded Funds (ETFs).

ETFs are generally more tax-efficient than mutual funds.

Why? Because ETFs are created and redeemed in large blocks, minimizing the need for frequent trading and triggering capital gains distributions. In contrast, mutual funds often buy and sell securities to accommodate investor transactions, which can lead to higher tax bills.

We’re always striving for tax efficiency!

Related: We just published, A Disciplined, Research-Driven Approach to Investment Success. Key points include tax-smart investing and our daily monitoring and rebalancing of accounts. (We review 20-to-30 client accounts daily.)

Magnificent 7 (Mag 7) Causing Overweighting in Portfolios

We’re actively focused on ensuring portfolios are balanced and, therefore, keep a close eye on any overweighting within portfolios.

Many investment funds are concentrated in large cap stocks, like the Mag 7 (Apple, Microsoft, Amazon, Nvidia, Tesla, Alphabet (Google) and Meta (Facebook/Instagram/Threads).

These companies are massive!

Here are two examples:

#1—Amazon and Microsoft are worth as much as the entire German economy (the largest economy in Europe).

#2—The Mag 7 are almost worth as much as the entire European Union’s GDP.

Overweighting Example & Financial Risks:

The Mag 7 stocks currently account for about 30% of the S&P 500’s total weighting.

This can lead to concentration and high-valuation risks.

Specifically, a fund’s performance is heavily tied to a few stocks, increasing its sensitivity to their fluctuations. Also, the Mag 7 stocks have increased in value substantially, prompting the question:

Do we really want to pay this extreme value?

To help safeguard against these risks, we’re analyzing “equal-weighted funds,” (e.g., if an investment has 100 holdings, each holding is only 1% of the fund).

These funds have the potential for more diversification and outperformance. Historically, equal-weighted funds have sometimes outperformed market-cap-weighted funds, (e.g., Vanguard 500 Index Fund, VFIAX) especially during periods when smaller companies outperform larger ones.

Back to overweighting…

A major Wall Street concern about the Mag 7 and other large corporations is their massive AI investments. Specifically, will this spending erode earnings?

Only time will tell.

Reminder: Year-End Financial Actions

Finally, just a reminder to revisit the following financial items by December 31:

  • Retirement Plan Contributions
  • Charitable Contributions, Including Qualified Charitable Distributions (QCDs)
  • Required Minimum Distributions (RMDs)
  • Health Savings Account (HSA) (Ideal for tax-free growth.)
  • Converting Employee-Sponsored 401(k)s to a Roth 401(k)
  • Partial or Full Roth Conversion (Helps minimize lifetime taxes.)
  • Defer Compensation for High Earners (If you’re preparing to retire, deferring income to the years immediately following retirement may help spread out your income and reduce taxes.)

See our Key Financial Data 2024 spreadsheet for retirement plan contribution limits, catch-ups, etc. For more information describing the above action items, read our post Essential Year-End Financial Action Items.

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.