529 Savings Plan Power Point

8/2/2019 529 Savings Plan Power Point

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NOT FDIC INSURED • MAY LOSE VALUE • NO BANK OR CREDIT UNION GUARANTEE

NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

05-05

Life lessons

MFS®

529 Savings Plan

Presented by:

Wayne R. Davies, CFP, ChFC

Davies Financial Services288 Main Street, Milford, MA 01757-2521508-478-2640 or toll free in MA 800-648-1000

Securities offered through H. D. Vest Investment Services.SM

Member SIPC. A wholly owned non-bank subsidiary of Wells Fargo & Company.

© 2005 MFS Investment Management®. MFS® investment products are offered through

MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116.

For information about the MFS ® 529 Savings Plan, please read the Participant Agreement and Disclosure Statement, alongwith the prospectus for each investment fund available through the plan. You should read the prospectus carefully beforeinvesting as it contains complete information on the fund's investment objective(s), the risks associated with aninvestment in the fund, the fees, charges, and expenses involved. These elements, as well as other information containedin the prospectus, should be considered carefully before investing.



529 PUBLIC-PRES-REV2 205-14890

General Notes

• The MFS® 529 Savings Plan is a flexiblecollege investing plan sponsored by the

state of Oregon and is administered byMFS Investment Management®.

•Depending on your state of residenceand the state of residence of the

beneficiary, an investment in the MFS529 Savings Plan may not afford you oryour beneficiary state tax benefits.

• This presentation must be accompaniedb the MFS



Lesson one:the simpler, the better




Key 529 tax advantages

• Earnings are tax deferred.• Withdrawals are free from federal tax through2010 if used for qualified higher educationexpenses. You will be subject to federal incometax on your earnings and may face a 10% federal

tax penalty if you withdraw money for somethingother than qualified higher education expenses.Unless Congress extends the law, the federal taxtreatment of 529 plans will revert to its statusprior to January 1, 2002.

• Gift and estate tax benefit allows you tocontribute up to $11,000 a year ($22,000 permarried couple) per beneficiary without payingfederal gift-tax consequences. Or you may gift upto $55,000 ($110,000 per married couple) toeach beneficiary. You will not incur federal gift1




Key 529 features

•Control over assets

•Wide range of investment options

•Additional fees are associated with 529

savings plans•Investments in 529s involve risk. You

should consider your financial needs,

goals, and risk tolerance prior toinvesting.

1



Lesson two:the reward often outweighs the cost


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The rising cost of college

Private Public

Participation does not guarantee that contributions and the investment return on contributions,if any, will be adequate to cover future tuition and other higher education expenses.

Source: MFS calculations using data from College Board's Trends in College Pricing 2004 for tuition and feesand room and board. Calculations assume college costs will increase by 5% per year on average in all

categories. For illustrative purposes only.

newbor

n

3 yrs.

6 yrs.

9 yrs.

12 yrs.

15 yrs.

17 yrs.

,3

$

193,18

3$

166,87

8

$

144,15

6

$

130,75

4

2

$106,82

4

$

92,278

$

79,713

$

68,859

$

59,483

$

53,953



Reap the rewards

Not a high schoolgrad

High school grad

Bachelor’s degreeMaster’s degree

Ph.D.

Professional(business, law,medicine)

$18,568

$26,817

$50,758$61,419

$84,021

$104,596

Education levelMeanannual

earnings

Participation in the plan does not guarantee that contributions and the investment returnon contributions, if any, will be adequate to cover future tuition and other higher educationexpenses.

Source: U.S. Census Bureau, March 2003



Lesson three:do the right thing



Less taxing, greater

growth potential

Annual return: 6%

Initial investment: $55,000

Tax bracket: 30%

This example is for illustrative purposes only and is not intended to predict the returns of anyinvestment choices. The performance of the investments will fluctuate with marketconditions. If there were no earnings, the account value will not increase. Fees andexpenses have not been taken into account. If they had been, the performance shown

would be lower.



A little goes a long way

This example is for illustrative purposes only and is not intended to predict the returns of anyinvestment choices. The performance of the investments will fluctuate with marketconditions.

Regular investing does not ensure a profit or protect against loss in declining markets.Investors should consider their ability to continue purchasing shares during periods of lowprice levels. Fees and expenses have not been taken into account. If they had been, the

performance shown would be lower.

Annual return: 6%



Lesson four:share the wealth



(turn to page 7 of the brochure)

A plan to

pass it on

This presentation may not be handed out and must be accompanied by the MFS Investment Management 529 Brochure – 529-MFSP-BRO-01-04.



Assumptions

• Married couple makes a gift of $110,000 to a 529 savingsplan account for their eight-year-old son, Connor.

• Connor starts public college at 18, attends for four years.

• Once Conner graduates from college, Mrs. Andersonchanges the owner of the account from herself to Connorwith a simple letter of instruction.

• Connor’s daughter Lily is born when he is 28. At that time,Connor takes advantage of the gifting rule unique to 529plans and gifts $55,000 in the year of Lily’s birth and everysuccessive fifth year, eventually moving the entire balance

of his account to an account for Lily.• Lily attends private college for four years.

• Hypothetical earnings are 6% per year for 40 years.

Hypothetical examples are for illustrative purposes only and are not intended to represent the future performance of any

MFS product.



Lesson five: askan expert



Comparison shop

The investments you choose should correspond to your financial needs, goals, and risk tolerance.For assistance in determining your financial situation, please consult an investment professional.

Income taxtreatment

Tax deferred. Nonqualifiedwithdrawals subject to incometaxes and 10%federal taxpenalty. Withdrawals are taxfree if used for qualified higher education expenses.

Earnings taxed atbeneficiary’s rate

Contributionlimits

Up to $250,000 per beneficiary

None $2,000 per child per year

Incomelimits

No limits No limits Phases out for single filers at$95,000 to $110,000; for jointfilers $190,000 to $220,000

Control of assets

Account owner Custodian until child reachesmajority, then the child

Account owner

Investmentflexibility

You can change your assetsamong funds once eachcalendar year or when youchange beneficiaries.

You can move your assets asoften as you want, but eachtransfer usually is a taxableevent.

You can move your assetsas often as you want.

MFS 529 SavingsPlan

UGMA/UTMA Education IRATax deferred. Nonqualifiedwithdrawals subject to incometaxes and 10% federal taxpenalty. Withdrawals are taxfree if used for qualified higher education expenses.



Comparison shop

Estateplanningfeatures

Assets are transferredout of the owner'sestate. Owner retainscontrol.

Asset aretransferred out of the estate.

Assets are transferredout of the owner’s estate.Ownerretains control.Uses Can be used for almost

anyaccredited post-secondary

school

No restrictions Can be used for anyqualifiededucational expense,including

elementary,secondary,and post-graduate

Ability tochangebeneficiaries

Can be transferred toanothermember of the samefamilywithout penalty

Not permitted Can be transferred toanothermember of the samefamilywithout penaltyPenalties on

nonqualifiedwithdrawals

Ordinary income taxesand a10% IRS penalty onearnings

None Ordinary income taxesand a10% IRS penalty onearningsState tax

deduction$2,000 for joint filersand $1,000 for singlefilers – Oregon residentsonly

No No

The investments you choose should correspond to your financial needs, goals, and risk tolerance.

For assistance in determining your financial situation, please consult an investment professional.

Fees $25 annual fee, waivedforaccounts valued over$25,000 and for Oregonresidents

Differs, dependingupon fundingvehicle

Differs, dependinguponfunding vehicle

MFS 529 SavingsPlan UGMA/UTMA Education IRA



Flexibility

•High contribution limit of $250,000

•Low minimum contribution of $250

•Reallocate contributions and earnings

among MFS funds once a year•MFS Automatic Exchange Plan



Complete owner control

•Retain control over the assets

•Change the designated beneficiary

•Roll over other college savings accounts

•Name contingent account owner




Age-based investment option

For more information on risk associated with these options,please see a prospectus.




Built-in allocation approach

Periodic rebalancing does not protect against loss in declining markets.Before selecting an asset allocation, you should understand the risksassociated with investments in stock, bond, international, and smallcompany funds.

Agressive growth

80%

20%

Growth

20%

20% 60%

Moderate

5%

35%

10%

50%

Conservative

10%

50%5%

35%

U.S. stocks

International stocks

Bonds

Cash




Convenient access

•Daily pricing

•MFS® Access

• Toll-free representative assistance

•Contribution confirmations

•Quarterly statements




Premier money management

•Global asset management expertiseacross all asset classes

• Time-tested money management processfor pursuing consistent results

•Full spectrum of investment productsbacked by

MFS Original Research®

•Resources and services targeted to real-life needs




Value-added resources

• MFS Heritage Planning®

– college savings options

– choosing a college

– financial aid

• mfs.com– Webcasts with MFS investment professionals and

industry experts

– links to 529 news, views, and more

–Calculate for College interactive tool• MFS educational series brochure – Jump Start

• The BabyMint TM advantage

BabyMint TM is a registered trademark of BabyMint, Inc..




Simple to start

•Determine which MFS investment optionsfit your goals and objectives

•Review the MFS®

529 Savings PlanParticipant Agreement and DisclosureStatement

•Complete the MFS® 529 Savings Plan

Account Application



The MFS® 529 Savings Plan is a flexible college investing plan sponsored by the state of Oregon and isadministered by MFS Investment Management®. Depending on your state of residence and the state of residence of the beneficiary, an investment in the MFS 529 Savings Plan may not afford you or your beneficiarystate tax benefits. There are additional fees with 529 savings plans.

The MFS ® 529 Savings Plan is only available in conjunction with qualified tuition programs.

Life lessonsMFS® 529 Savings Plan

529 Savings Plan Power Point

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Transcript of 529 Savings Plan Power Point