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tomorrow s scholar Start Investing for Tomorrow Today! * With 529 plans, control of assets remains in the hands of the account owner. It is not uncommon for ... – PowerPoint PPT presentation

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Title: tomorrow


1
tomorrows scholar
  • Start Investing for Tomorrow
  • Today!

2
Disclosure statements
tomorrows scholar portfolios involve risks,
including the possible loss of principal.
Consult a program description for additional
information on risks. An investment in the
Ultra-Conservative Portfolio is not insured or
guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Although the Ultra-Conservative Portfolio seeks
to preserve the value of your investment at
10.00 per share, it is possible to lose money by
investing in it. 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
tomorrowsscholar.com. Read it carefully before
investing. tomorrows scholar 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
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. 206860 01-12
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE
VALUE
3
Agenda
  • The importance of planning ahead
  • 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
  • Expenses and sales charges for tomorrows scholar

4
  • Increased earnings are by no means the only
    positive outcome of higher education. The
    knowledge, fulfillment, self-awareness, and
    broadening of horizons associated with education
    transform the lives of students and of those with
    whom they live and work.

- The College Board, Education Pays, 2010
5
The need for effective college planning
  • The rising costs of a four-year college
  • Tuition, books, room board add up quickly

454,439
Private University
210,873
Public University
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.
6
The power of planning ahead
350
Advantage of Investing vs. Student
Loans 165.56/month
301.31
300
  • 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.

250
200
135.75
150
100
50
0
Monthly Investment
Monthly Loan Payment
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
specific investment.
7
Putting time on your side
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
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.
8
College investing options
  • UGMA/UTMAs
  • Coverdell Education Savings Accounts
  • Roth IRAs
  • Savings Bonds
  • 529 College Savings Plans

9
Building your business with 529 plans
  • Flexibility for your clients
  • Control of the account
  • Tax advantages
  • Estate planning

10
Flexibility for your clients
  • High contribution limits
  • Anyone can contribute no income level
    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 (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.
11
Control of the account
  • Control of assets remains with the person who
    establishes the account
  • Successor
  • Distribution
  • Beneficiary

12
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.
13
Estate planning benefits
  • Ability to capture larger dollars than
    traditional college investing plans
  • Contributions to the plan qualify for the annual
    gift tax exclusion (13K single / 26K married
    couple)
  • Can gift up to 65K (130K married couple) per
    beneficiary 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 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 decedent's estate.
14
Grandparents can get involved too
Decreasing a taxable estate while paying for
college
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.
15
Additional tomorrows scholar plan details
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.
16
The flexibility of multiple investment 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 target date-type options automatically
    get more conservative as the years go by

17
Fixed allocation portfolios
GrowthPortfolio
BalancedPortfolio
9
7
40
50
43
51
Income Portfolio
Conservative Portfolio
Ultra-Conservative Portfolio
3
5
17
30
100
65
80
Bond Funds
International Stock Funds
Domestic Stock Funds
Money Market Funds
18
Enrollment-based portfolios
Aggressive Growth Track Portfolios
Moderate Growth Track Portfolios
Conservative Growth Track Portfolios
100
100
100
80
80
80
60
60
60
40
40
40
20
20
20
0
0
0
10 or more
7 to 9
4 to 6
1 to 3
In College
10 or more
7 to 9
4 to 6
1 to 3
In College
10 or more
7 to 9
4 to 6
1 to 3
In College
Years to College
Domestic Stock Funds
Bond Funds
International Stock Funds
Money Market Funds
19
The strength of a multi-manager strategy
  • The portfolios include investments from the
    following fund families
  • Wells Fargo Advantage Funds
  • Wells Fargo Advantage Capital Growth Fund
  • Wells Fargo Advantage Diversified Small Cap Fund
  • Wells Fargo Advantage Growth Fund
  • Wells Fargo Advantage Heritage Money Market Fund
  • Wells Fargo Advantage Income Plus Fund
  • Harbor Funds
  • Harbor International Fund
  • Columbia Funds
  • Columbia Marsico Growth Fund
  • Columbia Diversified Equity Income Fund
  • ING Funds
  • ING Intermediate Bond Fund
  • Wells Fargo Advantage Large Company Value Fund
  • Wells Fargo Advantage Opportunity Fund
  • Wells Fargo Advantage Special Mid Cap Value Fund
  • Wells Fargo Advantage Total Return Bond Fund

20
Value-added program
  • SAGE Scholars Tuition Rewards
  • tomorrowss scholar account owners receive
    discounts at private colleges
  • No fee to join
  • Over 265 member schools
  • Tuition points are earned based on account
    balances
  • Up to 10 annually
  • Earn up to 25 off of a four-year undergraduate
    tuition
  • Clients can register online at tomorrowsscholar.co
    m/sagescholars
  • As an advisor, you can also enroll clients and
    keep track of accounts online at
    tuitionrewards.com

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 tomorrows scholar college savings plan.
21
Class A load schedule
Breakpoints Growth and Balanced Portfolios1 Fixed-Income Portfolios2 Ultra-Conservative Portfolio
0 - 49,999 5.75 4.50 0.00
50,000 - 99,999 4.50 4.00 0.00
100,000 - 249,999 3.50 3.50 0.00
250,000 - 499,999 2.50 2.50 0.00
500,000 - 999,999 2.00 2.00 0.00
1,000,000 0.00 0.00 0.00
For accounts opened on or after September 10,
2005 1 Growth and Balanced Portfolios include the
Aggressive Growth (90 equity), Growth (75
equity), Moderate Growth (60 equity), and
Balanced (50 equity) Portfolios 2 Fixed-Income
Portfolios include the Conservative (35 equity)
and Income (20 equity) Portfolios
22
Portfolio expenses
Fund Expenses Admin Fees Portfolio Expenses
Aggressive Growth (90 Equity) 0.87 0.30 1.17
Growth (75 Equity) 0.81 0.30 1.11
Moderate Growth (60 Equity) 0.74 0.30 1.04
Balanced (50 Equity) 0.70 0.30 1.00
Conservative (35 Equity) 0.62 0.30 0.92
Income (20 Equity) 0.56 0.30 0.86
Ultra-Conservative (100 Money Market) 0.20 0.25 0.45
Fund expenses are based on a weighted average of
each underlying investment and the Funds expense
ratio, as of July 8, 2011. These figures do not
include the trailing commissions, which are 0.25
for Class A shares and Class C shares of the
Ultra-Conservative Portfolio and 1.00 for all
other Class C shares.
23
A recap of tomorrows scholar benefits
  • Tax advantages
  • Flexibility and competitive pricing
  • Estate planning and gifting benefits
  • Multiple investment options
  • Multi-manager investment approach
  • SAGE Scholars Tuition Rewards Program

24
Available tomorrows scholar materials
  • Product brochure for clients
  • One-page program reference sheet
  • SAGE Scholars enrollment instructions and school
    listing
  • Program description

25
Investing for Tomorrow
Today!
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