Edvest other 529 plans and FAFSA April 17

Edvest, other 529 plans, and FAFSA April 17, 2013 – WASFA Spring Conference Jim Di. Ulio, Director – Wisconsin 529 College Savings Program Catherine Burdick, Senior Marketing Manager – TIAA-CREF

Disclaimer: Not tax or investment advice n The material in this presentation is for professional use by student financial aid staff and is not to be used for advertising or sales to the general public. Edvest 529 plan investments involve risks, including possible loss of principal. There is no guarantee that an account will grow enough to cover higher education expenses. Consult with a professional for tax or investment situations that may affect you. n Carefully consider the investment objectives, risks, charges, and expenses of Edvest before investing. For a current program description, containing this and other information, visit www. edvest. com or call 888 -338 -3789.

What we’re covering today… Basics of 529 college savings plans p Wisconsin’s plans p n n n State tax benefits, rules 2012 program upgrade Social media, technology 529 s and FAFSA p Resources & your questions p

529 plan basics - nationwide p Look/work like 401 -k, 403 -b, 457 retirement plans n n n 90 -plus savings plans nationwide Direct- and advisor-sold A dozen more prepaid tuition plans p After-tax money, but no federal or state taxes on gains when used for qualified higher education expenses (states can add tax benefits) p Qualified expenses include tuition, fees, labs, room and board, books, (no cars, no loan repayments) p May be used at nearly every post-high school institution, technical college, university, including graduate, and professional programs (ED number), and many world-wide

529 plan basics - nationwide p Owner of account & intended beneficiary n p Add money at will, no obligations n n n p Beneficiary can be anyone, including self Lump sums, birthdays, automatic draws, other people Accept rollovers from other states’ 529 s, UTMA/UGMA Owner decides investments, account changes Owner always keeps control n n Directs when and where for withdrawals Can change beneficiary anytime

Change beneficiary anytime within family Grandparent Parent Spouse Beneficiar y Uncle/Aunt Brother/Sister Spouse In-Law Child Nephew/Niece Spouse Cousin

Withdrawing 529 plan assets p p Owner initiates request Direct payment to the school n p Payment to self n p p Prior to an expense, or reimbursement Tax-free if expenses cover withdrawals n p Checks, electronic transmission In the same calendar (tax) year Excess withdrawals subject to tax & penalty 529 plan issues Form 1099 -Q in January

General 529 tax information p No income restrictions on owners/contributors; growth is always tax-free, benefits often favor a state’s residents High lifetime limit for beneficiaries ($330, 000 Wisconsin) For gifting purposes, a 5 -year gift of $70, 000/$140, 000 allowed – always consult with the tax professionals! Can contribute to both 529 and Coverdell (ESA) accounts, worksheets for other federal programs Refer to IRS Publication 970 ‘Tax Benefits for Education’ Chapter on Qualified Tuition Programs covers 529

Review of 529 plan basics p p p p Federal and state tax-free growth, state benefits No income limits, all US citizens eligible Account owner/parent maintains control Dollars are portable, family-friendly rules Nearly every higher education school eligible Range of investment choices Set up accounts directly or through an advisor 529 can accept rollovers, gifts

Wisconsin 529 program upgrade in 2012 p Wells Fargo Funds decided to leave 529 market p Edvest, direct-sold - TIAA-CREF Tuition Financing Inc. n n n p From 15 to 22 portfolio choices Technology upgrades, more outreach, social media Lower investment fees, lower opening minimum Tomorrow’s Scholar, financial advisors – ING Investments n n From 7 to 31 portfolio choices Lower fees, more services to financial advisors

Cheesehead state-specific things p. Can save in any state’s 529 plan p. Both Wisconsin plans: n No account fees for residents n $330, 000 lifetime max per beneficiary n Tax benefit on contributions n State-taxable income is reduced dollar for dollar (for contributions up to $3, 000 each year), if the beneficiary is your child, grandchild, great-grandchild, niece, nephew, or self n Do not need a separate account, can add to existing one

Reduce Wisconsin taxable income, each tax year Grandparents, filing single or joint tax return, up to $3, 000 for each child Parents, filing single or joint tax return, up to $3, 000 for each child Aunt/Uncle, filing single or joint tax return, up to $3, 000 for each child Special rules for separations, divorced parents Beneficiary Brother/sister Brother/Sister

Helping Wisconsin’s families

Edvest is focused on our state p Simple task: Help families get their kids to college Outreach and community visits p Targeted marketing and advertising p Engage partners, including higher ed p p Let us know if you see an opportunity

Edvest is into media Follow on Facebook/Edvest Tweet us @edvest 529 Statewide commercial radio and WPR p Traditional media, too p

Seasonal and special promotions p p National College Savings month in September Back-to-school, year-end tax planning

Technology upgrades p Information-rich website - edvest. com n n Calculators and guides Financial education with investments Secure account access Links to other information Smartphone-optimized account access p Call center 7 to 7 CT, M-F 888 -338 -3779 p Links to college offices p

FAFSA and 529 accounts p 529 are a considered a parent asset n n p Withdrawals excluded from federal income n n p Not ‘added back’ Institutional methodology may differ Grandparent-owned accounts invisible n p Also if owned by a dependent student Or held by a custodian for the student This year’s withdrawals counted as student’s asset on FAFSA next year Withdrawals from multiple 529 accounts

Unique situations with 529 applications p 529 for yourself: CE, grad credits n n Librarians, school personnel, emergency workers Career upgrades, career changes, classes for enrichment p Parent 529 s, grandparent 529 s, and FAFSA p Large $$$ gifting provisions p Scholarships, military academies p Family foundations considering scholarships

529 resources, tools p p p www. collegesavings. org, multistate 529 site of CSPN, College Savings Plan Network www. savingforcollege. com, commercial site listing all 529 plan details and conversation with Joe Hurley, CPA Morningstar. com (basic and premium) n p p p All three have links to state/plan sites, additional information Locate 3, 800 colleges and current costs with the Archimedes calculators on Edvest and Tomorrow’s Scholar sites collegeboard. org, emma. msrb. org, fafsa. ed. gov, irs. gov Be leery of blogs, tweets, websites claiming to offer ‘college saving’ advice. Few writers in the national financial media understand the basic rules of 529.

THANKS FOR YOUR PARTICIPATION TODAY …GOOD LUCK TO YOU! Catherine Burdick Senior Marketing Manager TIAA-CREF Tuition Financing Inc. cburdick@tiaa-cref. org Cell 312 -835 -9725 Jim Di. Ulio Director, Wisconsin 529 College Savings Program james. diulio@wisconsin. gov Office 608 -264 -7886