Make the Most Of Your Investments for College

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Make the Most Of Your Investments for College
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Disclosure statements
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
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 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
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Todays topics

• Why invest for college?
• Investing in a 529 plan
• The benefits of EdVest
• EdVest investment options
• Getting started
• Questions answers

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Why invest for college?

• 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

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Will you have enough for college?

• The rising costs of a four-year college
• Tuition, books, room board add up quickly

454,439
Private University
Private University
Private University
210,873
Public University
Public University
Public University
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.
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The power of planning ahead
Advantage of Investing vs. Student
Loans 165.56/month
350
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 Repayment
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.
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Putting time on your side
Regular contributions of any amount can really
add up over time.
301.31
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.
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Investing in a 529 plan
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EdVest A Wisconsin 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

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The benefits of EdVest

• 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

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Tax advantages

• 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

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Tax advantages

• 100 Federal and Wisconsin state income tax-free
  qualified withdrawals
• Qualified education expenses include
• Tuition
• Room and board
• Books
• Certain special needs services

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.
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Gift and estate tax benefits

• 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
  contributors taxable 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 decedents estate.
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Gift and estate tax benefits
195,000 195,000
Gifts 65,000 per grandchild
Grandfather Smith
Gifts 65,000 for same grandchildren
390,000 removed from the couples taxable
estate
Grandmother Smith
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
couples taxable estate.
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Flexibility

• 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.
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Control of assets

• Control remains with the person who establishes
  the account
• There is no obligation to distribute the funds
• If the child doesnt 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.
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Eligibility

• 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

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SAGE Scholars Tuition Rewards

• 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

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.
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EdVest investment options
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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

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Fixed allocation portfolios
Aggressive Portfolios
More Aggressive
Less Aggressive
Vanguard Small Cap Index Portfolio
Vanguard Stock Index Portfolio
100
100
Vanguard International Index Portfolio
Wells Fargo Aggressive Portfolio
Invests entirely in the Vanguard Institutional
Index Fund.
Invests entirely in the Vanguard Small-Cap Index
Fund.
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10
100
73
Invests primarily in Wells Fargo Advantage U.S.
stock and international funds.
Invests entirely in the Vanguard Total
International Stock Index Fund.
International Stock Funds
Domestic Stock Funds
Bond Funds
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Fixed allocation portfolios
Moderate/Balanced Portfolios
More Aggressive
Less Aggressive
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Vanguard Balanced Portfolio
13
9
30
50
41
57
8
30-40
30-40
100
60-70
60-70
International Stock Funds
Domestic Stock Funds
Bond Funds
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Fixed allocation portfolios
Conservative Portfolios
Less Conservative
More Conservative
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25
100
70
Vanguard Bond Index Portfolio
100
100
Bond Funds
International Stock Funds
Money Market Funds
Domestic Stock Funds
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Enrollment-based portfolios
Aggressive Growth
Moderate Growth
Conservative Growth
10 Years to College
7-9 Years to College
4-6 Years to College
1-3 Years to College
In College
Bond Funds
International Stock Funds
Money Market Funds
Domestic Stock Funds
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Why EdVest? A review

• 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

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Thank You