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This presentation is authorized only when accompanied or preceded by a current Franklin Templeton

This presentation is authorized only when accompanied or preceded by a current Franklin Templeton 529 College Savings Plan Investor Handbook. Investors should carefully consider Plan investment goals, risks, charges and expenses before investing. To obtain the Investor Handbook, which contains this and other information, talk to your financial advisor or call Franklin Templeton Distributors, Inc. , the manager and underwriter for the Plan at (800) 818 -4030. You should read the Investor Handbook carefully before investing and consider whether your or the account beneficiary’s home state offers any state tax or other benefits that are only available for investments in its qualified tuition program. Not FDIC Insured • May Lose Value • No Bank Guarantee

A Smarter Way to Invest for College®

A Smarter Way to Invest for College®

2 What Do You Think This Number Represents? 409, 109

2 What Do You Think This Number Represents? 409, 109

3 The Rising Cost of College Education Projected Cost of a Four-Year College Education

3 The Rising Cost of College Education Projected Cost of a Four-Year College Education 1 1. Source: The College Board, Trends in College Pricing © 2012 The College Board, www. collegeboard. com. Projected cost based upon child’s entrance to a four-year public or private college. As reported by the College Board for 2012 -13, the $17, 860 public college cost and $39, 518 private college cost include tuition, fees, room and board. College cost inflation figures of 6. 33% (public) and 4. 74% (private) are based on the 10 -year average annual increase in public and private college costs respectively, as reported by The College Board for 2012 -13.

4 Education Provides a Lifelong Value Average Earnings in 2012, Based on Level of

4 Education Provides a Lifelong Value Average Earnings in 2012, Based on Level of Education 1 1. Source: U. S. Census Bureau, Current Population Survey, 2012 Annual Social and Economic Supplement.

5 Agenda • Putting Time on Your Side • Ways to Invest for College

5 Agenda • Putting Time on Your Side • Ways to Invest for College • A Smarter Way to Invest for College®

Putting Time on Your Side

Putting Time on Your Side

PUTTING TIME ON YOUR SIDE Don’t Delay the Inevitable • John: $250/month for 15

PUTTING TIME ON YOUR SIDE Don’t Delay the Inevitable • John: $250/month for 15 years • Mary: $612/month for 8 years • Michael: $1, 954/month for 3 years What do you think Mary and Michael will have to contribute on a monthly basis to accumulate the same amount as John? This is a hypothetical illustration to represent the effects of compounding assets monthly assuming an annual rate of return of 7%. It does not reflect an actual investment or any taxes payable upon withdrawal. A periodic investment does not assure a profit or protect against a loss in declining markets. Returns are not guaranteed and may be less than or greater than the amounts illustrated. 7

PUTTING TIME ON YOUR SIDE The Cost of Procrastination Assumes an Annual Rate of

PUTTING TIME ON YOUR SIDE The Cost of Procrastination Assumes an Annual Rate of Return of 7% This is a hypothetical illustration to represent the effects of compounding assets monthly assuming an annual rate of return of 7%. It does not reflect an actual investment or any taxes payable upon withdrawal. A periodic investment does not assure a profit or protect against a loss in declining markets. Returns are not guaranteed and may be less than or greater than the amounts illustrated. 8

9 PUTTING TIME ON YOUR SIDE Investing vs. Borrowing 1 Projected Cost of a

9 PUTTING TIME ON YOUR SIDE Investing vs. Borrowing 1 Projected Cost of a Newborn’s Public College Education ≈ $250, 000 Cost by investing $595 monthly for 18 years a $192, 548 difference Cost by borrowing the money for 15 years at 3. 40% 1. Source: Trends in College Pricing, © 2012 The College Board, www. collegeboard. org. Projected cost based upon child’s entrance to a 4 -year public or private college. As reported by the College Board for 2012– 13, the $17, 860 public college cost and $39, 518 private college cost include tuition, fees, room and board. College cost inflation figures of 6. 33% (public) and 4. 74% (private) are based on the 10 -year average annual increase in public and private college costs respectively, as reported by The College Board for 2012– 13. Savings example assumes an 7% annualized rate of return with contributions made at the beginning of each period. The borrowing example assumes a fixed interest rate of 3. 40% based on a subsidized Stafford loan issued between 7/1/2012– 6/30/2013. Assumed payments are made at the beginning of each period.

Ways to Invest for College

Ways to Invest for College

11 WAYS TO INVEST FOR COLLEGE What is a 529 College Savings Plan? A

11 WAYS TO INVEST FOR COLLEGE What is a 529 College Savings Plan? A state-sponsored tuition program designed to provide tax incentives to encourage families to save for the high cost of a college education. “Our daughter is only in preschool now but with the rising cost of a college education, it’s important for our family to invest in her future now. ”

12 WAYS TO INVEST FOR COLLEGE Tuition Room and board (if attending at least

12 WAYS TO INVEST FOR COLLEGE Tuition Room and board (if attending at least half time) 529 College Savings Plan Qualified Expenses Fees Books Required supplies and equipment

WAYS TO INVEST FOR COLLEGE Other College Savings Vehicles • UGMA/UTMA • Coverdell Education

WAYS TO INVEST FOR COLLEGE Other College Savings Vehicles • UGMA/UTMA • Coverdell Education Savings Account 13

14 WAYS TO INVEST FOR COLLEGE Comparison Chart COVERDELL EDUCATION SAVINGS ACCOUNT 529 COLLEGE

14 WAYS TO INVEST FOR COLLEGE Comparison Chart COVERDELL EDUCATION SAVINGS ACCOUNT 529 COLLEGE SAVINGS PLAN UGMA/UTMA Federal Tax Free Yes. Money grows income tax free and qualified distributions are federal income tax free No. Earnings are taxed at the parent’s or the minor’s rate Yes. Money grows income tax free and qualified distributions are federal income tax free Maximum Contribution On average up to $300, 000 or more per beneficiary 1 None $2, 000 per beneficiary under age 18 per year 2, 3 Income Limits No limits Phases out for single filers at $95, 000 to $110, 000; for joint filers, $190, 000 to $220, 000 For 529 College Savings Plans: Tax benefits are conditioned on meeting certain requirements. Federal income tax, a 10% federal tax penalty, and state income tax and penalties may apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. See a 529 disclosure document for more complete information. 1. Source: savingforcollege. com, October 2011. 2. Except in the case of a Special Needs Beneficiary. 3. Limits may be indexed for inflation in future years.

15 WAYS TO INVEST FOR COLLEGE Comparison Chart COVERDELL EDUCATION SAVINGS ACCOUNT 529 COLLEGE

15 WAYS TO INVEST FOR COLLEGE Comparison Chart COVERDELL EDUCATION SAVINGS ACCOUNT 529 COLLEGE SAVINGS PLAN UGMA/UTMA Who Controls Assets? Plan owner Custodian, until minor reaches age of majority (varies by state) Responsible Individual Ability To Change Beneficiary In most instances, beneficiary can be changed to another member of the beneficiary’s family, without penalty No Can be transferred to the account of an eligible member of the same family without tax consequences Estate. Planning Features Assets are generally transferred out of the donor’s estate, yet the donor retains control Assets are transferred out of the donor’s estate For 529 College Savings Plans: Tax benefits are conditioned on meeting certain requirements. Gift examples are general; individual financial circumstances and state laws vary—consult a tax advisor before investing. If the contributor dies within the five-year period, a prorated portion of contributions may be included in their taxable estate. See a 529 disclosure document for more complete information.

A SMARTER WAY TO INVEST FOR COLLEGE® Franklin Templeton 529 College Savings Plan OFFERED

A SMARTER WAY TO INVEST FOR COLLEGE® Franklin Templeton 529 College Savings Plan OFFERED NATIONWIDE BY THE NEW JERSEY HIGHER EDUCATION STUDENT ASSISTANCE AUTHORITY 1 1. Offered and administered by the New Jersey Higher Education Student Assistance Authority (HESAA); managed and distributed by Franklin Templeton Distributors, Inc. , an affiliate of Franklin Resources, Inc. , which operates as Franklin Templeton Investments. No federal or state guarantee. Principal value may be lost, and investing in the plan does not guarantee admission to college or sufficient funds for college. Please refer to the. Investor Handbook for more complete information.

A SMARTER WAY TO INVEST FOR COLLEGE ® Tax Advantages • Earnings grow federal

A SMARTER WAY TO INVEST FOR COLLEGE ® Tax Advantages • Earnings grow federal income tax free • Qualified withdrawals are free from federal income tax • Contributions receive favorable gifting and estate tax treatment Tax benefits are conditioned on meeting certain requirements. Federal income tax, a 10% federal tax penalty, and state income tax and penalties may apply to nonqualified withdrawals of earnings. Generationskipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. Gift examples are general; individual financial circumstances and state laws vary—consult a tax advisor before investing. If the contributor dies within the five-year period, a prorated portion of contributions may be included in their taxable estate. See the Investor Handbook for more complete information. 17

A SMARTER WAY TO INVEST FOR COLLEGE ® Additional Benefits • No annual maintance

A SMARTER WAY TO INVEST FOR COLLEGE ® Additional Benefits • No annual maintance • No income restrictions • Control over assets • Wide range of colleges and technical programs • Low contribution requirements • High contribution limits • Professional Investment Management 1 Each plan account is subject to an annual program management fee of 0. 40% of assets, underlying fund expenses, currently up to 0. 86% of assets, which may vary, and sales charges, which vary by class of shares. See the Investor Handbook for more complete information. 1. The plan is managed by Franklin Advisers, Inc. , an affiliate of Franklin Templeton Distributors, Inc. Plan portfolios generally invest in mutual funds managed by affiliates of Franklin Advisers, Inc. 18

19 A SMARTER WAY TO INVEST FOR COLLEGE ® Age-Based Asset Allocations 1 Domestic

19 A SMARTER WAY TO INVEST FOR COLLEGE ® Age-Based Asset Allocations 1 Domestic Equity International Equity Income Cash 1. An investment in Franklin Templeton 529 College Savings Plan is an investment in a municipal security that may invest in one or more underlying mutual funds. It is not an investment in shares of the underlying mutual fund(s). Asset allocation, diversification and rebalancing do not guarantee a profit or protect against loss.

20 A SMARTER WAY TO INVEST FOR COLLEGE ® Objective-Based Asset Allocations 1 Founding

20 A SMARTER WAY TO INVEST FOR COLLEGE ® Objective-Based Asset Allocations 1 Founding Funds 529 Portfolio 331/3% n Franklin Income Fund n Templeton Growth Fund n Mutual Shares Fund Corefolio® 529 Portfolio 25% 25% n Franklin Flex Cap Growth Fund n Franklin Growth Fund n Templeton Growth Fund n Mutual Shares Fund 1. An investment in Franklin Templeton 529 College Savings Plan is an investment in a municipal security that may invest in one or more underlying mutual funds. It is not an investment in shares of the underlying mutual fund(s). Asset allocation, diversification and rebalancing do not guarantee a profit or protect against loss.

21 A SMARTER WAY TO INVEST FOR COLLEGE ® Objective-Based Asset Allocations 1 Growth

21 A SMARTER WAY TO INVEST FOR COLLEGE ® Objective-Based Asset Allocations 1 Growth 529 Portfolio. Growth & Income 529 Portfolio 10% 30% 20% 35% 70% 40% 80% 15% Domestic Equity International Equity Income Cash 1. An investment in Franklin Templeton 529 College Savings Plan is an investment in a municipal security that may invest in one or more underlying mutual funds. It is not an investment in shares of the underlying mutual fund(s). Asset allocation, diversification and rebalancing do not guarantee a profit or protect against loss.

22 A SMARTER WAY TO INVEST FOR COLLEGE ® Individual Portfolios 1 GLOBAL HYBRID

22 A SMARTER WAY TO INVEST FOR COLLEGE ® Individual Portfolios 1 GLOBAL HYBRID Templeton Growth 529 Portfolio Franklin Income 529 Portfolio GROWTH PRINCIPAL PRESERVATION Franklin Growth 529 Portfolio Franklin Templeton Stable Value 529 Portfolio Franklin Small-Mid Cap Growth 529 Portfolio VALUE INDEX STYLE S&P 500 Index 529 Portfolio Mutual Shares 529 Portfolio The Franklin Templeton Stable Value 529 Portfolio is not insured or guaranteed by the FDIC or any other government agency and, while it seeks to preserve the value of investments, it is possible to lose money by investing in the portfolio. 1. An investment in Franklin Templeton 529 College Savings Plan is an investment in a municipal security that may invest in one or more underlying mutual funds. It is not an investment in shares of the underlying mutual fund(s). Asset allocation, diversification and rebalancing do not guarantee a profit or protect against loss.

23 Let’s Review Higher Education Leads to Opportunities Investing in a college education is

23 Let’s Review Higher Education Leads to Opportunities Investing in a college education is an expense you can afford. Put Time on Your Side Start small if you have to, but start now. Ways to Invest for College 529 plans offer a wider range of benefits than traditional college savings vehicles. A Smarter Way to Invest for College® Franklin Templeton 529 College Savings Plan makes it easy for you to get started and begin saving for college.

24 Take Action Today It’s as easy as 1, 2, 3 Educate yourself. Benefit

24 Take Action Today It’s as easy as 1, 2, 3 Educate yourself. Benefit from a financial advisor. Start investing today in Franklin Templeton 529 College Savings Plan.

Franklin Templeton Distributors, Inc. One Franklin Parkway San Mateo, California 94403 -1906 (800) 818

Franklin Templeton Distributors, Inc. One Franklin Parkway San Mateo, California 94403 -1906 (800) 818 -4030 franklintempleton. com This presentation is authorized only when accompanied or preceded by a current Franklin Templeton 529 College Savings Plan Investor Handbook. Investors should carefully consider Plan investment goals, risks, charges and expenses before investing. To obtain the Investor Handbook, which contains this and other information, talk to your financial advisor or call Franklin Templeton Distributors, Inc. , the manager and underwriter for the Plan at (800) 818 -4030. You should read the Investor Handbook carefully before investing and consider whether your or the account beneficiary’s home state offers any state tax or other benefits that are only available for investments in its qualified tuition program. Logos are trademarks of their respective owners. Logos are used to identify their respective companies and should not be construed as an endorsement of, or affiliation with, Franklin Templeton Investments. © 2013 Franklin Templeton Investments. All rights reserved. 529 SEM 6/13