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8/2/2019 529 Savings Plan Power Point
http://slidepdf.com/reader/full/529-savings-plan-power-point 1/27
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK OR CREDIT UNION GUARANTEE
NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF
05-05
Life lessons
MFS®
529 Savings Plan
Presented by:
Wayne R. Davies, CFP, ChFC
Davies Financial Services288 Main Street, Milford, MA 01757-2521508-478-2640 or toll free in MA 800-648-1000
Securities offered through H. D. Vest Investment Services.SM
Member SIPC. A wholly owned non-bank subsidiary of Wells Fargo & Company.
© 2005 MFS Investment Management®. MFS® investment products are offered through
MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116.
For information about the MFS ® 529 Savings Plan, please read the Participant Agreement and Disclosure Statement, alongwith the prospectus for each investment fund available through the plan. You should read the prospectus carefully beforeinvesting as it contains complete information on the fund's investment objective(s), the risks associated with aninvestment in the fund, the fees, charges, and expenses involved. These elements, as well as other information containedin the prospectus, should be considered carefully before investing.
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General Notes
• The MFS® 529 Savings Plan is a flexiblecollege investing plan sponsored by the
state of Oregon and is administered byMFS Investment Management®.
•Depending on your state of residenceand the state of residence of the
beneficiary, an investment in the MFS529 Savings Plan may not afford you oryour beneficiary state tax benefits.
• This presentation must be accompaniedb the MFS
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Lesson one:the simpler, the better
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Key 529 tax advantages
• Earnings are tax deferred.• Withdrawals are free from federal tax through2010 if used for qualified higher educationexpenses. You will be subject to federal incometax on your earnings and may face a 10% federal
tax penalty if you withdraw money for somethingother than qualified higher education expenses.Unless Congress extends the law, the federal taxtreatment of 529 plans will revert to its statusprior to January 1, 2002.
• Gift and estate tax benefit allows you tocontribute up to $11,000 a year ($22,000 permarried couple) per beneficiary without payingfederal gift-tax consequences. Or you may gift upto $55,000 ($110,000 per married couple) toeach beneficiary. You will not incur federal gift1
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Key 529 features
•Control over assets
•Wide range of investment options
•Additional fees are associated with 529
savings plans•Investments in 529s involve risk. You
should consider your financial needs,
goals, and risk tolerance prior toinvesting.
1
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Lesson two:the reward often outweighs the cost
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The rising cost of college
Private Public
Participation does not guarantee that contributions and the investment return on contributions,if any, will be adequate to cover future tuition and other higher education expenses.
Source: MFS calculations using data from College Board's Trends in College Pricing 2004 for tuition and feesand room and board. Calculations assume college costs will increase by 5% per year on average in all
categories. For illustrative purposes only.
newbor
n
3 yrs.
6 yrs.
9 yrs.
12 yrs.
15 yrs.
17 yrs.
,3
$
193,18
3$
166,87
8
$
144,15
6
$
130,75
4
2
$106,82
4
$
92,278
$
79,713
$
68,859
$
59,483
$
53,953
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Reap the rewards
Not a high schoolgrad
High school grad
Bachelor’s degreeMaster’s degree
Ph.D.
Professional(business, law,medicine)
$18,568
$26,817
$50,758$61,419
$84,021
$104,596
Education levelMeanannual
earnings
Participation in the plan does not guarantee that contributions and the investment returnon contributions, if any, will be adequate to cover future tuition and other higher educationexpenses.
Source: U.S. Census Bureau, March 2003
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Lesson three:do the right thing
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Less taxing, greater
growth potential
Annual return: 6%
Initial investment: $55,000
Tax bracket: 30%
This example is for illustrative purposes only and is not intended to predict the returns of anyinvestment choices. The performance of the investments will fluctuate with marketconditions. If there were no earnings, the account value will not increase. Fees andexpenses have not been taken into account. If they had been, the performance shown
would be lower.
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A little goes a long way
This example is for illustrative purposes only and is not intended to predict the returns of anyinvestment choices. The performance of the investments will fluctuate with marketconditions.
Regular investing does not ensure a profit or protect against loss in declining markets.Investors should consider their ability to continue purchasing shares during periods of lowprice levels. Fees and expenses have not been taken into account. If they had been, the
performance shown would be lower.
Annual return: 6%
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Lesson four:share the wealth
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(turn to page 7 of the brochure)
A plan to
pass it on
This presentation may not be handed out and must be accompanied by the MFS Investment Management 529 Brochure – 529-MFSP-BRO-01-04.
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Assumptions
• Married couple makes a gift of $110,000 to a 529 savingsplan account for their eight-year-old son, Connor.
• Connor starts public college at 18, attends for four years.
• Once Conner graduates from college, Mrs. Andersonchanges the owner of the account from herself to Connorwith a simple letter of instruction.
• Connor’s daughter Lily is born when he is 28. At that time,Connor takes advantage of the gifting rule unique to 529plans and gifts $55,000 in the year of Lily’s birth and everysuccessive fifth year, eventually moving the entire balance
of his account to an account for Lily.• Lily attends private college for four years.
• Hypothetical earnings are 6% per year for 40 years.
Hypothetical examples are for illustrative purposes only and are not intended to represent the future performance of any
MFS product.
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Lesson five: askan expert
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Comparison shop
The investments you choose should correspond to your financial needs, goals, and risk tolerance.For assistance in determining your financial situation, please consult an investment professional.
Income taxtreatment
Tax deferred. Nonqualifiedwithdrawals subject to incometaxes and 10%federal taxpenalty. Withdrawals are taxfree if used for qualified higher education expenses.
Earnings taxed atbeneficiary’s rate
Contributionlimits
Up to $250,000 per beneficiary
None $2,000 per child per year
Incomelimits
No limits No limits Phases out for single filers at$95,000 to $110,000; for jointfilers $190,000 to $220,000
Control of assets
Account owner Custodian until child reachesmajority, then the child
Account owner
Investmentflexibility
You can change your assetsamong funds once eachcalendar year or when youchange beneficiaries.
You can move your assets asoften as you want, but eachtransfer usually is a taxableevent.
You can move your assetsas often as you want.
MFS 529 SavingsPlan
UGMA/UTMA Education IRATax deferred. Nonqualifiedwithdrawals subject to incometaxes and 10% federal taxpenalty. Withdrawals are taxfree if used for qualified higher education expenses.
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Comparison shop
Estateplanningfeatures
Assets are transferredout of the owner'sestate. Owner retainscontrol.
Asset aretransferred out of the estate.
Assets are transferredout of the owner’s estate.Ownerretains control.Uses Can be used for almost
anyaccredited post-secondary
school
No restrictions Can be used for anyqualifiededucational expense,including
elementary,secondary,and post-graduate
Ability tochangebeneficiaries
Can be transferred toanothermember of the samefamilywithout penalty
Not permitted Can be transferred toanothermember of the samefamilywithout penaltyPenalties on
nonqualifiedwithdrawals
Ordinary income taxesand a10% IRS penalty onearnings
None Ordinary income taxesand a10% IRS penalty onearningsState tax
deduction$2,000 for joint filersand $1,000 for singlefilers – Oregon residentsonly
No No
The investments you choose should correspond to your financial needs, goals, and risk tolerance.
For assistance in determining your financial situation, please consult an investment professional.
Fees $25 annual fee, waivedforaccounts valued over$25,000 and for Oregonresidents
Differs, dependingupon fundingvehicle
Differs, dependinguponfunding vehicle
MFS 529 SavingsPlan UGMA/UTMA Education IRA
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Flexibility
•High contribution limit of $250,000
•Low minimum contribution of $250
•Reallocate contributions and earnings
among MFS funds once a year•MFS Automatic Exchange Plan
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Complete owner control
•Retain control over the assets
•Change the designated beneficiary
•Roll over other college savings accounts
•Name contingent account owner
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Age-based investment option
For more information on risk associated with these options,please see a prospectus.
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Built-in allocation approach
Periodic rebalancing does not protect against loss in declining markets.Before selecting an asset allocation, you should understand the risksassociated with investments in stock, bond, international, and smallcompany funds.
Agressive growth
80%
20%
Growth
20%
20% 60%
Moderate
5%
35%
10%
50%
Conservative
10%
50%5%
35%
U.S. stocks
International stocks
Bonds
Cash
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Convenient access
•Daily pricing
•MFS® Access
• Toll-free representative assistance
•Contribution confirmations
•Quarterly statements
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Premier money management
•Global asset management expertiseacross all asset classes
• Time-tested money management processfor pursuing consistent results
•Full spectrum of investment productsbacked by
MFS Original Research®
•Resources and services targeted to real-life needs
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Value-added resources
• MFS Heritage Planning®
– college savings options
– choosing a college
– financial aid
• mfs.com– Webcasts with MFS investment professionals and
industry experts
– links to 529 news, views, and more
–Calculate for College interactive tool• MFS educational series brochure – Jump Start
• The BabyMint TM advantage
BabyMint TM is a registered trademark of BabyMint, Inc..
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Simple to start
•Determine which MFS investment optionsfit your goals and objectives
•Review the MFS®
529 Savings PlanParticipant Agreement and DisclosureStatement
•Complete the MFS® 529 Savings Plan
Account Application
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The MFS® 529 Savings Plan is a flexible college investing plan sponsored by the state of Oregon and isadministered by MFS Investment Management®. Depending on your state of residence and the state of residence of the beneficiary, an investment in the MFS 529 Savings Plan may not afford you or your beneficiarystate tax benefits. There are additional fees with 529 savings plans.
The MFS ® 529 Savings Plan is only available in conjunction with qualified tuition programs.
Life lessonsMFS® 529 Savings Plan