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Make the Most Of Your Investments for College
EdVestSM 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 investment in the Wells Fargo Money Market Portfolio is not insured or guaranteed by the FDIC or any other government agency. Although the Portfolio seeks to preserve the value of your investment at $10.00 per share, it is possible to lose money by investing in it. Consult the program description for additional information on these and other risks.
An investor’s or a designated beneficiary’s home state may offer state tax or other benefits that are only available for investments in that state’s qualified tuition program. Please consider this before investing.
Carefully consider the investment objectives, risks, charges, and expenses of EdVest before investing. For a current program description, containing this and other information, call 1-888-338-3789 or visit EdVest.com. Read it carefully before investing.
EdVest is a state-sponsored 529 college savings plan administered by the State of Wisconsin. Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment management and administrative services for the EdVest plan. Shares in the program are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company. 206861 01-12
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
Disclosure statementsDisclosure statements
Today’s topicsToday’s topics
Why invest for college?
Investing in a 529 plan
The benefits of EdVest
EdVest investment options
Getting started
Questions & answers
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
Why invest for college?Why invest for college?
Costs based on 2011-2012 estimate of average tuition and room and board in current dollars for four-year public and private universities according to the 2011Trends in College Pricing, published by the College Board. Projected pricing assumes a 6 percent annual increase in college costs.
The rising costs of a four-year college
Tuition, books, room & board add up quickly
Will you have enough for college?Will you have enough for college?
Private University
Public University
Private University
Public University$0
$100,000
$200,000
$300,000
$400,000
$500,000
2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
$210,873
$454,439
Private University
Public University
*Assumptions: Total cost of college $25,000; 8% annual return on investment 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 specific investment.
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.*
$135.75
$301.31
$0
$50
$100
$150
$200
$250
$300
$350
Monthly Investment Monthly Loan Repayment
Advantage of Investing vs. Student Loans$165.56/month
The power of planning aheadThe power of planning ahead
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.
$301.31
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
$250per month
$500 per month
$23,021
$92,083
$46,041
$0
$20,000
$40,000
$60,000
$80,000
$100,000
Putting time on your sidePutting time on your side
Investing in a 529 plan
A flexible, tax-advantaged investing program
A state-sponsored “Section 529” College Savings Program
Administered by the State of Wisconsin
Managed by Wells Fargo Funds Management, LLC
An easy, effective way to invest for higher education regardless of income level
EdVestEdVest – A Wisconsin 529 plan – A Wisconsin 529 plan
While not all investors may be able to take advantage of all the tax and other benefits of EdVest, here are four key features that may benefit you.
Tax advantages
Wisconsin state tax deductions
Income tax benefits
Gift and estate tax benefits
Flexibility
Control of the account
Eligibility
The benefits of The benefits of EdVestEdVest
Wisconsin state tax deduction
Up to $3,000 annually from taxable state income per beneficiary
Available for parents, grandparents, great-grandparents, aunts and uncles
Also available for individuals who open accounts for themselves
Contribute by December 31 of the current tax year
Tax advantagesTax advantages
100% Federal and Wisconsin state income tax-free qualified withdrawals
Qualified education expenses include:
Tuition
Room and board
Books
Certain special needs services
Tax advantagesTax advantages
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 a hypothetical annual return of 8%, compounded monthly. This chart is for illustration only and does not predict or guarantee the performance of any investment. Investors should consider their personal investment horizon and their current and anticipated income tax brackets when making an investment decision.
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 decedent’s estate.
Contributions are considered a completed gift and are eligible for the annual $13,000 ($26,000 for married couples) gift tax and generation-skipping exemptions
For larger contributions, up to a $65,000 ($130,000 for married couples) one-time gift may be prorated over five years
IRS form 709 should be filed to report this contribution
All contributions are removed from the contributor’s taxable estate
Gift and estate tax benefitsGift and estate tax benefits
= $390,000removed from the couple’s
taxable estate
$195,000
+
$195,000
The gift tax exclusion can be very powerful. In this example, a grandfather and grandmother each provide 3 one-time gifts of $65,000 to 3 grandchildren. The gifts are prorated over five years and a total of $390,000 is removed from the couple’s taxable estate.
Gifts $65,000 per grandchild
Gifts $65,000 for same grandchildren
Grandfather Smith
Grandmother Smith
Gift and estate tax benefitsGift and estate tax benefits
Funds can be used at thousands of colleges, universities, technical schools, graduate schools, and trade schools nationwide, and many abroad
Money can be used for tuition, room and board (the student must be enrolled at least half-time), books, and other expenses
High contribution limit
Can use an automatic investment plan or payroll deduction
A program of regular investment cannot assure a profit or protect against a loss in a declining market.
FlexibilityFlexibility
Control remains with the person who establishes the account
There is no obligation to distribute the funds
If the child doesn’t go to college, the owner can change the beneficiary or withdraw the funds*
The owner can:
Make an investment change for existing assets once per calendar year, or at any time with a change in beneficiary
Choose a successor owner
Make distribution decisions concerning the assets
*The earnings portion of non-qualified withdrawals is treated as income and is subject to applicable federal and state income tax as well as an additional 10% federal tax.
Control of assetsControl of assets
Everyone is eligible!
Anyone of legal age can open an account for anyone else
There are no age limits on beneficiaries
Anyone can contribute to an existing account
You can even open an account for yourself
No income limits for contributors
Transfers allowed tax-free and penalty-free to eligible family members
EligibilityEligibility
The Tuition Rewards program is offered and administered by SAGE Scholars, Inc., a private for-profit corporation. SAGE Scholars is not sponsored by or affiliated with Wells Fargo or the EdVest college savings plan.
Allows EdVest account owners to receive discounts for undergraduate school tuition at participating private schools throughout the country
Awards tuition points based on your account balances – up to 10% annually
Each reward point equals $1 in guaranteed tuition discounts at participating private colleges and universities
Over 265 member schools
No fee to join
Enroll online at EdVest.com/sage
SAGE Scholars Tuition RewardsSAGE Scholars Tuition Rewards®®
EdVest investment options
Wide range of investment options to meet your needs
Eleven fixed allocation options
Offering a range of investments, from more aggressive to very conservative
Three enrollment-based options
Offering portfolios that are based on the number of years until college enrollment
These options automatically become more conservative as the years go by
EdVestEdVest investment options investment options
Aggressive Portfolios
Vanguard Small Cap Index Portfolio
Vanguard Stock Index Portfolio
Wells Fargo Aggressive PortfolioInvests entirely in the
Vanguard Institutional Index Fund.
Invests entirely in the Vanguard Small-Cap
Index Fund.
Invests primarily in Wells Fargo Advantage U.S. stock
and international funds.
International Stock Funds Domestic Stock Funds Bond Funds
100%100%
17%10%
73%
100%100%
More Aggressive Less Aggressive
Fixed allocation portfoliosFixed allocation portfolios
Vanguard International
Index Portfolio
Invests entirely in the Vanguard Total International
Stock Index Fund.
100%100%
Wells Fargo Moderate Portfolio
Invests entirely in the Vanguard WellingtonTM Fund.
Invests in both Wells Fargo Advantage
stock and bond funds.
Invests primarily in Wells Fargo Advantage U.S.
stock funds.
Vanguard Balanced Portfolio
Wells Fargo Balanced Portfolio
100%
Moderate/Balanced Portfolios
30%-40%
60-70%
8%
30%
13%
57%
60%-70%
30%-40%
41%
9%
50%
More Aggressive Less Aggressive
30%
International Stock Funds Domestic Stock Funds Bond Funds
Fixed allocation portfoliosFixed allocation portfolios
Wells Fargo Money Market
PortfolioVanguard Bond Index Portfolio
Wells Fargo Bond Portfolio
Invests entirely in the Vanguard Total Bond Market Index Fund.
Invests entirely in the Wells Fargo Advantage Heritage
Money Market FundSM
Invests only in Wells Fargo Advantage
bond funds.
Conservative Portfolios
100%
100% 100%
Less Conservative More Conservative
Invests primarily in Wells Fargo Advantage
bond funds.
70%
5%
25%
International Stock Funds
Domestic Stock Funds
Bond Funds
Money Market Funds
Wells Fargo Conservative
Portfolio
Fixed allocation portfoliosFixed allocation portfolios
10+ Years to College
7-9 Years to College
4-6 Years to College
1-3 Years to College
Aggressive Growth Moderate Growth Conservative Growth
In College
International Stock Funds
Domestic Stock Funds
Bond Funds
Money Market Funds
Enrollment-based portfoliosEnrollment-based portfolios
Although not all investors may be able to take advantage of all the tax and other benefits of EdVest, here is a recap of the key benefits.
Tax advantages
Flexibility
Control of the account
Eligibility
SAGE Scholars Tuition Rewards Program
Multiple investment options
Why Why EdVestEdVest? A review? A review
Thank You