Windsor Wealth Management LLC

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Windsor Money Minute

A Key Trend Worth Watching & Your Portfolio

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There’s been no shortage of noise lately about an “AI bubble.”

Yet, the data suggests we’re seeing a structural shift in how the economy operates—driven by steady, long-term investments rather than speculation.

As the chart below shows, technology and R&D spending as a share of the U.S. economy is now higher than it was during the dot-com era, currently led by massive investments in AI infrastructure.

However, unlike the 90s, today’s tech leaders are backed by robust earnings and significant cash reserves—capital that’s available for acquisitions, stock buybacks and weathering downturns without needing to raise outside funding.

Chart Source: Capital Group1

Who will win? A key trend to watch.

All this spending begs the question: how does this build-out translate into shareholder returns?

While current winners include the companies building data centers and power grids that supply the computing power AI requires, history suggests the biggest beneficiaries may not even exist yet.

Just as the internet reaching critical mass enabled companies like Facebook (Meta) and PayPal, today’s AI infrastructure build-out is setting the stage for a new generation of high-growth businesses.

So who will they be?

That’s the key question—and only time will tell.

In the meantime, we’re focused on data and research—tracking where investment, earnings and innovation are converging.

You can read more about this concept and the data behind it in Capital Group’s article, 4 charts on why the U.S. economy could stay resilient.2

Your Portfolio: Rebalancing Is Critical During Aggressive Growth

One of our core disciplines during periods of strong growth is frequent rebalancing.

Specifically, trimming positions and taking profits when portfolios drift out of alignment, rather than chasing what’s already run up.

As always, our focus remains the same: staying invested, staying balanced and keeping your long-term plan on track—regardless of the headlines.

Final Thought

It’s important to remember that roughly $7.5 trillion is sitting in money market funds and cash equivalents waiting to be invested.

This sidelined capital adds a significant layer of economic stability, especially during times of loud “AI bubble” noise.

If you’d like to talk through how this trend fits into your portfolio, reach out anytime.

Happy Holidays,

–David Bunker, Financial Advisor & Licensed Fiduciary

P.S. — I recently spent some time analyzing the year ahead. If you’re curious about what’s coming next, you can find my breakdown here: Rate Cuts, Jobs and Growth: A Look at 2026.

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.

Source:

1 & 2: Capital Group, 4 charts on why the U.S. economy could stay resilient, https://www.capitalgroup.com/ria/insights/articles/4-charts-us-economy-resilient.html

3 Later-in-Life Conversations; Important Decisions as Life Changes

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With the holiday season approaching, many of us are looking forward to favorite traditions like gathering for a big family dinner, watching a classic movie or relaxing by the fire together.

It’s also an ideal time to discuss how important decisions should be handled as your life changes.

Of course, these conversations are not always easy.

In fact, a new Fidelity study on later-in-life conversations found that as families age, they actually talk less about the topics that matter most.1

Even among financially prepared households, discussions often stall when it comes to three critical issues:

#1—Decision-Making and Change of Control: Who steps in if you can’t make financial or medical decisions?

#2—Dependence and Dependent Living: What’s the plan if living independently becomes difficult?

#3—Thinking Ahead for a Health Incident: Do loved ones know your wishes and how to access important information?

Fidelity’s research shows these conversations drop sharply around age 70, just when they become most urgent.

Also, nearly nine in ten baby boomers say at least one emotional barrier keeps them from talking about later-life issues, including not feeling prepared or not knowing how to start.

According to the study, baby boomers rank thinking ahead for a health incident as one of their most relevant topics. Yet, it’s the topic they’re most unwilling to talk about.

And while many describe their family communication as “open,” two-thirds admit they aren’t actually discussing the topics they consider most relevant.

The study also found that families who have active, ongoing conversations report more confidence that their plans will unfold smoothly, and feel closer as a result.

If you haven’t revisited your plan for these situations, now is the time.

We’re happy to help you:

  • Review or update your powers of attorney and health-care directives.
  • Clarify who makes what decisions and where key documents are stored.
  • Model how long-term care or a sudden health event could affect your finances.

[RELATED]: Longevity plays a major role in how long your plan needs to work for you. We discuss this and two other key considerations in our post, 3 Critical Retirement Planning Dynamics.

Let’s make sure your financial plan reflects both your wishes for care and decision-making.

Sincerely,

–David Bunker, Financial Advisor & Licensed Fiduciary

P.S., In case you missed it, check out our latest blog post: 5 Financial Moves to Make Before Year-End

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.

Source:

1: Fidelity, Later-in-Life Conversations Study, https://www.fidelity.com/bin-public/600_Fidelity_Institutional/fidelityinstitutional/Application/AP168302/family/TGP_LIL_Report_FCFE_FINAL.pdf

The Fed Cuts Rates, Here’s Why It Matters

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Here’s a quick update on the Fed’s recent rate cut.

What happened?

On Sept. 17, the Fed announced a 0.25% rate cut in response to a softening labor market and a slight uptick in inflation. This move brings the federal funds rate to about 4% to 4.25%, the key benchmark for many other interest rates across the U.S. economy.

Why the rate reduction?

The main reason behind this decision is the Fed’s concern about the labor market.

The Bureau of Labor Statistics’ August jobs report showed a clear slowdown in job gains, and the unemployment rate inched up.1

Remember, the Fed’s dual mandate is to keep both inflation low and employment high.

In simple terms, this cut is aimed at making it cheaper for businesses to borrow and invest—potentially encouraging more hiring.

Fidelity’s chart below highlights the job slowdown since 2023. You can also see the unemployment rate trending up:

Chart Source: Fidelity2

Two More Rate Cuts Possible by Year-End

Analysts are forecasting the possibility of two more rate cuts before year-end.

The prospect of more cuts is good news for consumers with adjustable-rate debt, e.g., mortgages, credit cards and auto loans.

However, it usually also means lower interest earnings on savings and money market accounts. Also, rate cuts can trigger concern, i.e., if businesses and consumers believe the economy is headed for a slump, they may reduce spending and investment regardless of lower interest rates.

Looking Ahead

We’ll be watching key economic indicators like the upcoming jobs report and the latest inflation data, which will give us a clearer picture of the Fed’s next move at their October 28-29 meeting.

Please reach out with any questions.

–David Bunker, Financial Advisor & Licensed Fiduciary

P.S., In case you missed it, see our post: September 2025 Market Update & Key Trends

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: Bureau of Labor Statistics, The Employment Situation—August 2025, https://www.bls.gov/news.release/pdf/empsit.pdf

2: Fidelity, Rate cuts are here, https://www.fidelity.com/learning-center/trading-investing/the-fed-meeting

Stress-Free Retirement Spending: The “Bucket” Strategy

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A few months ago, we shared thoughts on how to spend confidently in retirement without regret.

Today, we’re adding to that idea with a simple strategy: the “bucket” approach to retirement income planning.

What is the bucket strategy?

The idea is simple: instead of treating your retirement savings as one big pot of money, we divide it into time-based “buckets.”

  • Near-term needs (0–3 years): Cash-like investments for everyday expenses (still earning interest).
  • Short- to mid-term (3–7 years): Conservative investments for stability.
  • Longer-term (7–25 years): Growth-oriented investments that have time to weather market ups and downs.

Capital Group’s chart below does a great job of showing five buckets that tie directly into the three timelines we emphasize: near-term, short- to mid-term and long-term:1

Why It Works

What makes this system powerful is how the buckets generally stay replenished over time.

As growth-oriented investments in the longer-term buckets mature, we gradually move a portion “down” to refill the nearer-term buckets. That way, you know your next few years of spending are covered—while the rest of your portfolio continues working for the future.

For Example:

Imagine you’ve spent down most of your 3–7 year conservative bucket. We’d replenish it by shifting gains from your 7–13 year growth bucket, helping to ensure the money you’ll need next is already set aside—without having to sell investments at a bad time.

It’s a structured, practical way to reduce worry about market swings while keeping your retirement income flowing. (Here’s more about our disciplined investment approach.)

Please reach out with any questions.

–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.

Source:

1: Capital Group: The bucket approach to retirement income, https://www.capitalgroup.com/advisor/insights/articles/ir-bucket-strategy-putting-it-into-practice.html

2025 Tax Changes: One Big Beautiful Bill Act (OBBBA)

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Just a quick update about some recent tax law changes, some will likely impact you.

President Trump signed the One Big Beautiful Bill Act (OBBBA) on July 4. The Act primarily extends and replaces the expiring 2017 Tax Cuts and Jobs Act (TCJA).

Among all the changes, one really stood out: a major increase to the cap on State and Local Tax (SALT) deductions.

Starting in 2025, the SALT deduction cap will increase from $10,000 to $40,000 for households earning under $500,000. For higher incomes, this cap gradually gets smaller.

(Note): The higher cap, which is effective until the end of 2029, will revert to $10,000 starting in 2030.1

SALT Deduction “Savings” Example

The higher SALT deduction means some taxpayers may save more money by itemizing their taxes this year versus taking the standard deduction.

Here’s an example…

Assumptions:

  • Married Filing Jointly
  • Adjusted Gross Income (AGI): $300,000
  • SALT Paid: $35,000 (including property and state income tax)
  • Other Itemized Deductions: $7,000 (e.g., charitable giving and modest or no mortgage interest, common for many pre-retirees and retirees with paid-down loans)

This example shows how the increased SALT deduction can shift a married couple’s advantage, enabling them to itemize for an extra $10,500 in deductions, leading to an estimated $2,520 in tax savings compared to the prior 2024 standard deduction rules.

Temporary Deductions

The Act also introduces several new temporary deductions for 2025-2028, including:

  • A $6,000 deduction for single filers ($12,000 for joint filers) for those aged 65+.

  • Up to $25,000 for tips; and overtime wages ($12,500 for single filers, $25,000 joint filers). Note, payroll taxes still apply.

  • Up to $10,000 for qualifying auto loan interest on new, U.S.-assembled vehicles.

Keep in mind, the above deductions are subject to income phase-outs and other restrictions.2

Other Key OBBBA Highlights:

Permanent Tax Cuts: Many TCJA provisions are now permanent, including the existing individual income tax brackets (10%, 12%, 22%, 24%, 32%, 35% and 37%), and the increased standard deduction, now $15,750 for single filers, $23,625 for heads of household and $31,500 for joint filers, for 2025.

Child Tax Credit: The Child Tax Credit is permanently increased to $2,200 beginning in 2025, and will be indexed for inflation beginning in 2026.3

[Deep Dive Resource]: For an OBBBA deep (deep) dive, read Breaking Down The One Big Beautiful Bill Act: Impact Of New Laws On Tax Planning.

These are significant tax changes, and we’ve only scratched the surface. To see how they might impact you using our tax modeling software, please reach out.

It will be an exciting tax season for sure!

–David Bunker, Financial Advisor & Licensed Fiduciary

P.S…Our Key Financial Data spreadsheet is now updated with the OBBBA changes, including 2025 tax brackets, standard deductions, child tax credit and much more.

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.

Source:

1, 2, 3: Kitces.com, Breaking Down The “One Big Beautiful Bill Act”: Impact Of New Laws On Tax Planning. https://www.kitces.com/blog/obbba-one-big-beautiful-bill-act-tax-planning-salt-cap-senior-deduction-qbi-deduction-tax-cut-and-jobs-act-tcja-amt-trump-accounts/

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.

Top 2025 Summer Travel Spots & Average Costs

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Summer is officially here—and for many of us, that means travel plans are heating up.

More than 2 in 5 Americans (44%) plan to take a vacation this summer that involves a flight or hotel stay, with an average trip cost of $3,861, according to NerdWallet’s annual summer travel survey.

That’s about 117 million Americans, spending roughly $452 billion on flights and hotels this summer.1

Where’s everyone going?

Seattle is the top domestic destination for Americans, and Cancun leads internationally, according to travel insurance provider Allianz Partners. Most are staying closer to home, with 71% of itineraries booked for U.S. travel and 29% for international trips.2

Overall, Americans are headed to both big cities and relaxed beach towns.

Source: Allianz Partners

Top 10 Domestic Locations

Ranked by popularity, the top domestic destinations for summer 2025 are: Seattle; Orlando; New York; Honolulu; Kahului, Hawaii; Boston; Portland, Oregon; Las Vegas; Los Angeles; and Anchorage, Alaska.

Internationally, the top destinations include:

Cancun; San Jose del Cabo, Mexico; London; Punta Cana, Dominican Republic; Montego Bay, Jamaica; Calgary, Canada; Oranjestad, Aruba; Paris; Puerto Vallarta, Mexico; and Dublin, according to Allianz Partners.

It’s always interesting to see the trends.

Remember, before booking, check travel advisories on the CDC Travelers’ Health3, TSA.gov4 and U.S. Department of State5 websites.

–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: Nerd Wallet: 2025 Summer Travel Report, https://www.nerdwallet.com/article/travel/2025-summer-travel-report

2: Allianz Partners: Beaches and Big Cities Remain the Top Travel Destination for American Summer Travelers, https://www.allianzworldwidepartners.com/usa/media-center/press-releases/Beaches-and-big-cities-remain-the-top-travel-destination-for-American-summer-vacations.html

3: CDC Travelers’ Health: https://wwwnc.cdc.gov/travel

4: Transportation Security Administration: https://www.tsa.gov

5: U.S. Department of State: https://travel.state.gov/content/travel/en/traveladvisories/traveladvisories.html/

Is market news scaring you? Here’s the bigger picture.

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Could the financial news headlines be more daunting?

Trade uncertainty and its economic ripple effects are behind most of these headlines. (Read our post for the “real” impact of tariffs.)

However, a crucial point often absent in media coverage is the historical link between market volatility and long-term portfolio growth.

For Example:

The below chart depicts the growth of one dollar from 1926 till 2024. The red lines highlight 20%+ market drops.

As you’ll see, time after time the market bounces back—even higher.

Your Financial Plan

We’ve built your financial plan to navigate market volatility.

Candidly, if you want long-term portfolio growth, then the price you pay is short-term volatility.

Unsurprisingly, we’ve seen this recent volatility before, i.e., during Covid. And, we bounced back from that—even higher!

Uncertainty drives volatility.

No one knows when the volatility will end. Nevertheless, we’re confidently buying valuable companies on sale.

I encourage you to stay the course and maintain your financial plan.

Reach out with any concerns or questions.

–David Bunker, Financial Advisor & Licensed Fiduciary

P.S. Thank you to everyone who requested a copy of Bill Perkins’ “Die With Zero.” I was thrilled by the response following last month’s email, How To Spend Confidently & Without Regret in Retirement, where we discussed the book. I still have a few copies available, so please let me know if you’d like one.

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.

S&P 500 Shifts From Home Runs to Singles and Doubles

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For the past few years, the Magnificent 7 have dominated market earnings growth, at one point soaring nearly 60%. (see chart)

However, this pace is unsustainable.

As expected, the Mag 7’s (Apple, Microsoft, Amazon, Nvidia, Tesla, Alphabet and Meta) earnings growth is slowing. It’s now projected around 20%, still a strong gain.

Meanwhile, the rest of the S&P 500 is growing steadily.

This is a welcome sign, since diversification helps manage risk, (i.e., instead of home runs, the market’s delivering singles and doubles—small, steady gains that add up over time).

Let’s face it, home runs are great.

But, a well-rounded team—built on singles, doubles and solid defense—wins more games.

The same goes for diversification in investing.

What’s causing the shift?

Steady economic growth is helping drive the broader earnings, including a GDP around 2.5-2.7% and low unemployment. AI also remains a key growth driver.

It’s encouraging to see more companies contributing to earnings growth.

Granted, the right side of the chart (gray shaded area) is an estimate, but if these trends hold, we’re likely looking at a more balanced market in the coming months.

PS: If you missed it, we previously shared a detailed update on the economy: The Economy, Tariffs & Consumer Sentiment.

–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.