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

• EdVest 529 portfolio investments involve risks,
  including the possible loss of principal. Consult
  a program description for additional information
  on risks.
• An investment in the Wells Fargo Money Market
  Portfolio or the Bank CD Portfolio is not insured
  or guaranteed by the FDIC or any other government
  agency. Although these Portfolios seek to
  preserve the value of your investment at 10.00
  per share, it is possible to lose money by
  investing in these Portfolios. Bank CD Portfolio
  account owners do not have an ownership interest
  or any other rights as an owner of CDs in which
  the Bank CD Portfolio invests. 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
  1-888-338-3739 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. 206859 01-12

NOT FDIC INSURED ? NO BANK GUARANTEE ? MAY LOSE
VALUE
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Agenda

• The importance of planning ahead
• Different college investing options
• What are 529s all about?
• The EdVest Plan
• Benefits of EdVest
• SAGE Scholars Tuition Rewards Program
• Investment options
• Expenses and sales charges

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• 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
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The need for effective college planning

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

454,439
Private University
Private University
Private University
Private University
210,873
Public University
Public University
Public University
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.
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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 savings 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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Comparing a 529 to other investments
(Contd)
1Certain federal tax attributes for Coverdell
Education Savings Accounts will expire on
December 31, 2012. Unless extended or modified by
future legislation, the maximum annual
contribution limit will be reduced from 2000 to
500 and withdrawals for K12 education expenses
will no longer be tax-free. 2Up to the amount of
the scholarship.
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Comparing other investments (contd)
1Certain federal tax attributes for Coverdell
Education Savings Accounts will expire on
December 31, 2012. Unless extended or modified by
future legislation, the maximum annual
contribution limit will be reduced from 2000 to
500 and withdrawals for K12 education expenses
will no longer be tax-free. 2Up to the amount of
the scholarship.
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EdVest 529 college savings plan

• A state-sponsored Section 529 College Savings
  Program
• Administered by the State of Wisconsin
• Managed by Wells Fargo Funds Management, LLC
• Oversight by the Wisconsin College Savings
  Program Board

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EdVest benefits taxes

• 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
• If withdrawals are made for qualified expenses
• Earnings are federal tax-free
• Earnings are Wisconsin state tax-free
• Earnings are potentially state-tax free in other
  states

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EdVest benefits gift and estate taxes

• 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

(Contd)
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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EdVest benefits gift and estate taxes
Gift and estate tax benefits (contd)
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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Using EdVest investments

• Funds can be used at any eligible school of
  higher education
• Includes public and private colleges, vocational
  schools, post-secondary schools, graduate
  schools, and some schools abroad
• Eligible schools can be determined by searching
  for a school code at fafsa.ed.gov or
  EdVest.com/schools
• Money can be used for tuition, room and board
  (student must be enrolled at least half-time),
  books, supplies, fees and equipment required for
  enrollment or attendance
• If the student receives scholarships, you can
  withdraw the amount equal to the scholarships
  penalty-free

The earnings portion of a distribution on
account of a qualified scholarship is subject to
applicable federal and state income tax, but free
from the additional 10 federal tax.
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Additional benefits

• Transfers between investment options and
  beneficiaries are allowed
• Investment changes are allowed once per calendar
  year without a change in the designated
  beneficiary
• Beneficiary changes are allowed between family
  members
• Includes siblings, children, parents,
  aunts/uncles, first-cousins, among others
• Flexible contribution options
• Clients can invest as little as 250 or 15 per
  month with an Automatic Investment Plan (AIP) or
  as much as 330,000 per beneficiary

A program of regular investment cannot assure a
profit or protect against a loss in a declining
market.
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Value-added program

• SAGE Scholars Tuition Rewards
• EdVest 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 EdVest.com/sage
• 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 EdVest college savings plan.
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Investment options

• Choice of investments ranging from aggressive to
  conservative
• Professionally managed portfolios with underlying
  investments from Wells Fargo Advantage Funds and
  Vanguard
• 14 investment choices
• 11 fixed allocation options
• 3 enrollment-based options

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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
5
25
100
70
Vanguard Bond Index Portfolio
100
100
Bond Funds
International Stock Funds
Money Market Funds
Domestic Stock Funds
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Single-fund portfolios

• Six single-fund portfolios include the following
  mutual fund options
• Vanguard Institutional Index Fund
• Vanguard Small-Cap Index Fund
• Vanguard Total Bond Market Index Fund
• Vanguard Total International Stock Index Fund
• Vanguard Wellington Fund
• Wells Fargo Advantage Heritage Money Market Fund

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Wells Fargo multi-fund portfolios

• Five multi-fund portfolios include a combination
  of the following mutual funds
• Wells Fargo Advantage Capital Growth Fund
• Wells Fargo Advantage Diversified International
  Fund
• Wells Fargo Advantage Diversified Small Cap Fund
• Wells Fargo Advantage Emerging Markets Equity
  Fund
• Wells Fargo Advantage Equity Value Fund
• Wells Fargo Advantage Government Securities Fund
• Wells Fargo Advantage Growth Fund
• Wells Fargo Advantage Large Company Value Fund
• Wells Fargo Advantage Opportunity Fund
• Wells Fargo Advantage Short-Term Bond Fund
• Wells Fargo Advantage Special Mid Cap Value Fund
• Wells Fargo Advantage Total Return Bond Fund

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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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EdVest A low cost plan

• No enrollment fee
• No annual maintenance fee for Wisconsin residents
• Non-resident fee of 20 may be waived for
  accounts with any of the following
• Account balance is over 25,000
• Active monthly automatic investment plan for
  previous 12 months or since inception on the
  account
• Active monthly payroll direct deposit for
  previous 12 months or must have been started
  within 6 weeks of opening the account
• Annual asset-based fees ranging from 0.33 to
  1.06 as of July 8, 2011
• Ten portfolios with an expense ratio less than
  1.00
• Excludes the trailing commissions, which are
  0.25 for Class A shares and the Money Market
  Portfolio Class C shares and 1.00 for all other
  Class C shares

A program of regular investment cannot assure a
profit or protect against a loss in a declining
market.
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Class A load schedule
1 Growth and Balanced Portfolios include the
Vanguard Balanced, Vanguard International Index,
Vanguard Small Cap Index, Vanguard Stock Index,
Wells Fargo Aggressive, Wells Fargo Balanced, and
Wells Fargo Moderate. 2 Fixed-Income Portfolios
include the Vanguard Bond Index and Wells Fargo
Bond Portfolios.
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EdVest materials

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

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Thank you