tomorrow’s scholar ® start investing for tomorrow… today!

Download Tomorrow’s scholar ® Start Investing for Tomorrow… Today!

Post on 27-Dec-2015




0 download

Embed Size (px)


  • Slide 1
  • tomorrows scholar Start Investing for Tomorrow Today!
  • Slide 2
  • Disclosure statements tomorrows scholar portfolios may invest in stock and bond investments. Stock investment values fluctuate in response to the activities of individual companies and general market and economic conditions. Bond investment values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. In general, when interest rates rise, bond investment values fall and investors may lose principal value. Consult a program description for additional information on these and other risks. There is no guarantee that an account will grow enough to cover higher education expenses. An investors or a designated beneficiarys home state may offer state tax or other benefits that are only available for investments in that states qualified tuition program. Please consider this before investing. Carefully consider the investment objectives, risks, charges, and expenses of tomorrows scholar before investing. For a current program description, containing this and other information, call 1-866-677-6933 or visit Read it carefully before investing. tomorrows scholar is a state-sponsored 529 college savings plan administered by the Wisconsin Office of the State Treasurer. Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment management and administrative services to the tomorrows scholar plan. Shares in the program are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company. 206862 01-12 NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
  • Slide 3
  • Agenda Why invest for college Different college investing options What are 529s all about? tomorrows scholar Investment options within tomorrows scholar The multi-manager strategy SAGE Scholars Tuition Rewards Program
  • Slide 4
  • Why investing for college is important Why is investing for college important? College can help a child or grandchild have a brighter future Reduces reliance on student loans Uses time and the power of compounding to your advantage Keeps your options open by planning ahead
  • Slide 5
  • Will you have enough for college? Costs based on 2011-2012 estimate of average tuition, fees, and room and board in current dollars for 4-year public and private universities according to the 2011 Trends in College Pricing published by the College Board. Projected pricing assumes a 6% annual increase in college costs. The rising costs of a four-year college Tuition, books, room & board add up quickly $210,873 $454,439 Public University Private University
  • Slide 6
  • The power of planning ahead $135.75 $301.31 $0 $50 $100 $150 $200 $250 $300 $350 Monthly InvestmentMonthly Loan Payment Advantage of Investing vs. Student Loans $165.56/month *Assumptions: Total cost of college $25,000; 8% annual return on investments and 8% loan interest rate, compounded monthly; 10-year investing period and 10-year loan payback period. Annual return does not represent the performance of any tomorrows scholar portfolio. Invest now or borrow later: To cover $25,000 in college expenses, investing for 10 years before college is a lot cheaper than paying back loans for 10 years after college.*
  • Slide 7
  • A program of regular investment cannot assure a profit or protect against a loss in a declining market. This hypothetical illustration assumes an average annual return of 8%. Annual return does not represent the performance of any specific investment. Regular contributions of any amount can really add up over time. This chart shows an account with monthly contributions over a 10- year period. $125 per month $250 per month $500 per month Putting time on your side
  • Slide 8
  • UGMA/UTMAs Coverdell Education Savings Accounts Roth IRAs Savings Bonds 529 College Savings Plans College investing options
  • Slide 9
  • 529s vs. other investing vehicles YES $2,000 per beneficiary, up to age 18 $5,000 annually for Series EE and I Bonds for each series YES Federal Tax Deferral Maximum Contribution Income Limits Time/Age Restrictions Coverdell Education Savings Account Savings Bonds YES $5,000 in 2012; adjusted for inflation thereafter YES Roth IRA YES Established by program; many in excess of $300,000 NO 529s YES NO NONE NO YES UGMA/ UTMA YES NO Estate Planning Gift Planning YES NO
  • Slide 10
  • While not all investors may be able to take advantage of all the tax and other benefits of tomorrows scholar, here are four key features that may benefit you. Flexibility Control of the account Tax advantages Estate planning The benefits of investing in 529s
  • Slide 11
  • High contribution limits Anyone can contribute no income restrictions or age limitations Use at schools nationwide and many abroad for a wide range of expenses Money can be used for qualified expenses, including tuition, fees, books, supplies, room and board (the student must be enrolled at least half-time), and required equipment Note: Individual states impose their own restrictions and rules on 529 College Savings Plans. Flexibility of 529s
  • Slide 12
  • Control of the account Control of assets remains with the person who establishes the account Successor Distribution Beneficiary
  • Slide 13
  • The power of tax-deferred growth Compare the growth potential of a taxable investment vs. a tax-deferred 529 account This hypothetical illustration shows the growth of an annual investment of $5,000 made at the beginning of each year. It assumes a 28% tax bracket and an annual return of 8%, compounded monthly with a tax rate of 15% for dividends and long-term gains and 28% for short-term gains. The chart is for illustration only and does not predict or guarantee the performance of any tomorrow's scholar portfolio. Investors should consider their personal investment horizon, as well as their current and anticipated income tax brackets when making an investment decision.
  • Slide 14
  • One size does not fit all In-state vs. out-of-state plans State tax treatment of 529 plans varies from state to state and can be a factor in deciding which plan to select Some states offer a 529 tax deduction for state residents; others might offer a tax credit for 529 contributions Understand the value of your state's tax deduction In some cases, the tax deduction benefit may be offset by performance, contribution limits, and other plan features that are important to you
  • Slide 15
  • Estate planning benefits Can gift up to $65K ($130K married couple) per child in one year without incurring gift and generation- skipping transfer taxes, provided no other gifts are made to the same beneficiary in the 5-year period Contributions to the plan qualify for the $13K ($26K married couple) annual gift tax exclusion Contributions are considered removed from the donors estate* *If donor contributes more than $13,000 in one year and elects to apply the gift tax exclusion ratably over 5 years but dies before the close of the 5-year period, the portion allocable to calendar years beginning after the date of death is included in the decedents estate.
  • Slide 16
  • Grandparents $520,000 Grandchild 1 $130,000 Grandchild 2 $130,000 Grandchild 3 $130,000 Grandchild 4 $130,000 Decrease your taxable estate while paying for college Grandparents can get involved too The gift tax exclusion can be very powerful. In this example, a grandfather and grandmother each provide 4 one-time gifts of $65,000 to 4 grandchildren. The $65,000 gifts are prorated over five years and a total of $520,000 is removed from the couples taxable estate.
  • Slide 17
  • tomorrows scholar Wells Fargo and the State of Wisconsin have teamed up to offer the tomorrows scholar college savings plan. The program is managed by Wells Fargo Funds Management, LLC.
  • Slide 18
  • The flexibility of multiple options Wide range of options to meet your needs Seven fixed allocation options Offering a range of investments, from more aggressive to very conservative Three enrollment-based tracks Offering portfolios that are based on the number of years until college enrollment These options automatically get more conservative as the years go by
  • Slide 19
  • Fixed allocation portfolios Growth Portfolio Aggressive Growth Portfolio 64% 25% 11% Domestic Stock Funds Bond FundsInternational Stock Funds 50%43% 51% 40% 9% Balanced Portfolio Moderate Growth Portfolio 80% 17% 65% 30% Income Portfolio Conservative Portfolio Ultra-Conservative Portfolio 100% Money Market Funds 13% 10% 77% 7% 5% 3%
  • Slide 20
  • Aggressive Growth Track Portfolios Moderate Growth Track Portfolios Conservative Growth Track Portfolios 100% 80% 60% 20% 0% 40% 100% 80% 60% 20% 0% 40% 100% 80% 60% 20% 0% 40% 10 or more 7 to 94 to 61 to 3In College 10 or more 7 to 94 to 61 to 3In College 10 or more 7 to 94 to 61 to 3In College Years to College Domestic Stock FundsBond Funds International Stock Funds Money Market Funds Enrollment-based portfolios
  • Slide 21
  • The strength of a multi-manager strategy The portfolios include investments from the following fund families: Wells Fargo Advantage Funds Harbor Funds Columbia Funds ING Funds
  • Slide 22
  • The Tuition Rewards program is offered and a


View more >