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DFA Reduces Cost Of Mutual Funds

Dimensional Fund Advisors (DFA) announced they are cutting costs on seventy-seven of their mutual funds beginning February 28th.  This represents an average management fee reduction of 8% on their funds, which are already considered low cost when compared to their industry peers. Any reduction in the cost of the mutual funds we use means that you, the investor, get to keep more of the returns earned by the fund.  We have long advocated for using low cost, tax efficient funds to implement our portfolios.  Morningstar, an independent mutual fund rating firm, has concluded in their own study that the cost of a mutual fund is one of the best predictors of the fund’s ability to perform well relative to its peers. Naturally, we ran a quick calculation to try and estimate how much we expect the annual savings will be for our portfolios.  We determined that the average cost of our 60%...

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Coronavirus: Short Term vs Long Term

The headlines have been dominated recently by the spread of the coronavirus and confirmation of over 80,000 global cases.  The stock market has taken notice, and as of this writing, markets have declined approximately 11% from their recent highs last week.  Meanwhile, the bond market has rallied strongly as investors flock to safer investments. Undoubtedly, this outbreak has caused many people to become fearful about what might happen to the stock market and global economy going forward.  We certainly are no experts in health care or medicine so we will save everyone from having to hear our opinion about how the coronavirus situation may play out. What we can do, however, is provide perspective on how past outbreaks have affected markets and what investors should keep in mind as the markets fluctuate.  According to First Trust, during the last forty years there have been twelve major outbreaks.  During those events, the average...

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The Difference Between Tax Preparation and Tax Planning

In the first quarter of each year, much of America turns their attention to filing tax returns. It’s not something we relish, but necessary to comply with the tax code.  So this year, while you are forced to think about taxes and perhaps have all the important documents in front of you, make a decision to also do some tax planning. So what’s the difference between tax preparation and tax planning?  That is an important distinction.  Tax preparation requires us to look back upon the past year and provide an accounting to the IRS about the amount of tax we owe.  While your tax preparer will use every technique to minimize this amount, the opportunities to improve your tax picture for the past year are somewhat limited. Conversely, tax planning is forward looking to the coming tax year and beyond.  It’s quite understandable that your tax preparer may not be in a...

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Sad News From Level Financial Advisors

It is with a heavy heart that we announce the passing of our founder, mentor, and friend, Alan Vogt, who died peacefully with his family by his side on Tuesday evening.  Alan founded our firm in 1979 as Paramount Planning and grew the company into a regional leader in fee-only financial planning, helping hundreds of families and individuals along the way. Before his retirement in 2010, Alan was one of the first advisors in the country to embrace fee-only financial planning, gaining his CERTIFIED FINANCIAL PLANNER™ certification in 1984.   His pioneering commitment to fiduciary advice for clients became the bedrock that guides Level Financial Advisors and its employees today. Alan graduated from Cornell University in 1954 with a bachelor’s degree in labor and industrial relations and later received his law degree from the State University of New York at Buffalo in 1960, finishing first in his class. In his early career he...

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DFA and Vanguard Named to Best Parent Fund Companies List

Morningstar, an independent mutual fund rating company, recently updated their parent ratings on mutual fund companies.  The two primary mutual fund companies we use, Dimensional Fund Advisors (DFA) and Vanguard, were both given a high rating, the top rating available by Morningstar.  Only five total mutual fund companies, of which more than 50 were rated, received the top rating of high. Morningstar reviewed fund companies from several angles such as culture, long-term focus, ownership structure, manager tenure, regulatory infractions and ethical practices, and providing strategies that have served investors well. When speaking about Vanguard, Morningstar’s Alec Lucas said “Vanguard gained its stature by following Jack Bogle's playbook: pairing relatively predictable strategies, both passive and active, with minimal costs. That's enriched Vanguard's investors, and those outside its flock who have benefited from industrywide fee compression.” Daniel Sotiroff wrote about DFA; “Dimensional Fund Advisors continues to be an outstanding steward of its shareholders' capital. …...

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Paul Coleman III, CFP® Named President of FPA of WNY

PRESS RELEASE Amherst, NY: Level Financial Advisors announced that one of its advisors, Paul Coleman III, CFP®, was recently named President of the Financial Planning Association of Western New York.  Coleman has served on the board of the FPA since 2016 and was most recently the organization’s Treasurer. Mr. Coleman is a CERTIFIED FINANCIAL PLANNER™ professional with Level, having joined the firm in 2014. He is a graduate of SUNY Alfred with a Bachelors of Business Administration in Financial Planning. In his new role with the FPA, Mr. Coleman will oversee the association’s activities and finances, and work with the organization’s 117 members. The group meets on a monthly basis and also sponsors various networking and educational events throughout the year.  He will continue to service his clients at Level Financial. The FPA of WNY provides its membership with opportunities for networking, continuing education, and media exposure; it’s mission is to elevate the profession...

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2020 Tax Bracket and Contribution Changes

As the IRS does every year, all the tax brackets are increasing by the annual inflation amount. This is beneficial because it gives the consumer the ability to keep up with the rising cost of living. But don’t worry, it’s really just a regular IRS tax adjustment and not any major overhaul like we had a few years ago. 2020 Tax Brackets for Single Tax Payers Taxable Income Tax Rate $0 - $9,875 10% $9,875 - $40,125 12% $40,125 - $85,525 22% $85,525 - $163,300 24% $163,300 - $207,350 32% $207,350 - $518,400 35% $518,400+ 37% 2020 Tax Brackets for Married Filing Jointly Taxable Income Tax Rate $0 - $19,750 10% $19,750 - $80,250 12% $80,250 - $171,050 22% $171,050 - $326,600 24% $326,600 - $414,700 32% $414,700 - $622,050 35% $622,050+ 37% Head of Household 2020 Tax Brackets Taxable income Tax Rate $0-$14,100 10% $14,100-$53,700 12% $53,700-$85,500 22% $85,500-$163,300 24% $163,300-$207,350 32% $207,350-$518,400 35% $518,400+ 37% Married Filing Separately 2020 Tax Brackets Taxable Income Marginal Tax Rate: $0-$9,875 10% $9,875-$40,125 12% $40,125-$85,525 22% $85,525-$163,300 24% $163,300-$207,350 32% $207,350-$311,025 35% $311,025+ 37% Standard Deduction: The standard deduction is an amount you can deduct from your total taxable income for the tax filing year. The standard deduction has increased in 2020 to the following limits: Single or married filing separately: $12,400 Married...

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