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Not FDIC Insured May Lose Value Not FDIC Insured May Lose Value

Not FDIC Insured May Lose Value - PowerPoint Presentation

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Not FDIC Insured May Lose Value - PPT Presentation

No Bank Guarantee The Challenge Source The College Board 2015 College costs are rising Four years of tuition and fees 2016 Public college in state 40 861 Private college 140711 ID: 782513

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Presentation Transcript

Slide1

Not FDIC Insured

May Lose Value

No Bank Guarantee

Slide2

The Challenge

Slide3

Source:

The College Board,

2015

College costs are rising

Four years of tuition and fees

2016

Public

college(in state)$40,861Private college$140,711

$

107,115

2034

$

368,870

Slide4

College debt is also risingTotal education debt — including federal and private education loans — is expected to tally nearly $68 billion this year for graduates with a bachelor’s degree and their parents, a more than 10-fold increase since 1994

Almost 71% of bachelor’s degree recipients will graduate with a student loan

The average class of 2015 graduate with student-loan debt will have to pay back a little more than $35,000

Source:

Edvisors, May 2015.

Slide5

College still offers life-long benefitsLinked to long-term social and physical wellness Higher income over lifetime, depending upon major selectedDecreased likelihood of unemployment

Source:

U.S. Department of Labor, 2015.

Slide6

Help meet the challenge with a

529 plan

Slide7

What is a 529 plan?A tax-advantaged way for families to save for collegeAvailable to investors nationwide

Proceeds can be used for any accredited college

Slide8

Benefits of a 529 planAnyone — regardless of income — can contribute to the accountYou can change beneficiaries at any time

Control of the account will not shift to the child

as with traditional savings accounts

Favorable financial aid treatment

Slide9

Benefits of a 529 planRollovers allowed once every 12 months or upon change of a beneficiaryInvestment changes allowed twice per calendar year

You have other options if the child does not

attend college

Slide10

The tax-smart way to saveYou pay no federal income taxesOn your earnings while the account is invested

When you withdraw money to pay for college expenses

Contributions are made with after-tax dollars

Withdrawals of earnings not used to pay for qualified higher education expenses are subject to tax and a 10% penalty. State taxes may apply. Withdrawals for qualified higher education expenses subject to tax if the American Opportunity Credit Scholarship or Lifetime Learning Credit is claimed for same expenses. If withdrawing funds for qualified higher education expenses from both a 529 account and a Coverdell Education Savings Account, a portion of the earnings distribution may be subject to tax and penalty on amounts that exceed qualified higher education expenses. Read the offering statement for details.

Slide11

The tax-smart way to saveGift tax benefits: Make five years’ worth of gifts without triggering the federal gift tax

Maximum for individuals: $70,000 for 2016

Maximum for married couples: $140,000

Slide12

The tax-smart way to saveA 529 account can help decrease your taxable estate while you maintain control over assets

Married couples filing jointly may contribute up to $140,000 per beneficiary. Individuals may contribute up to $70,000. Contributions are generally treated as gifts to the beneficiary for federal gift tax purposes and are subject to annual federal gift tax exclusion amount

($14,000

for

2016). Contributor may elect to treat contribution in excess of that amount (up to $70,000 for 2016) as pro-rated over 5 years. Election is made by filing a federal gift tax return. While contributions are generally excludable from contributor’s gross estate, if electing contributor dies during 5-year period, amounts allocable to years after death are includible in contributor’s

gross estate. Consult your tax advisor for more information.

$140,000

$140,000

$140,000

$140,000

Grandparents

$700,000

$140,000

Slide13

Slide14

A wide range of investment choicesAge-based portfoliosGoal-based portfolios Individual fund options from Putnam and other firms

Putnam Absolute Return Funds

Slide15

Age-based portfolios

Actively managed and adjusted over time, becoming more conservative as your child approaches college age

Asset allocations shown are target allocations. Actual allocations may vary.

The

age-based and goal-based options invest across four broad asset categories: short-term investments, fixed-income investments, U.S. equity investments, and non-U.S. equity investments. Within these categories, investments are spread over a range of asset allocation portfolios that concentrate on different asset classes or reflect different

styles.

Each age-based portfolio has a different target date, which is based on the year in which the beneficiary of an account was born. The principal value of the funds is not guaranteed at any time, including age-based portfolios closest to college age.

Newborn

4

8

12

18

Stocks

Bonds

Cash

85%

15%

60%

14%

26%

Slide16

Goal-based portfolios

Balanced

Allocations shown are target allocations; actual allocations may vary. See the offering statement for details.

Actively managed and keep the same allocation mix, regardless

of the child

s age

Aggressive growth

Growth

Balanced Option

Growth Option

Aggressive Growth Option

Putnam 529 GAA Growth Portfolio

Putnam 529 Balanced Portfolio

Putnam 529 Money Market Portfolio

Invests in the Putnam 529 GAA Growth Portfolio and Putnam 529 All Equity Portfolio

Invests in the Putnam 529 GAA All Equity Portfolio

Stocks

Bonds

Cash

100%

85%

15%

34%

6%

60%

Slide17

Individual investment options

Stocks

Bonds

Cash

Putnam Equity Income Fund Option

Putnam International Capital Opportunities Fund Option

Putnam Voyager Fund Option

Putnam Small Cap Value Fund Option

MFS Institutional International Equity Fund Option

Principal

MidCap

Fund Option

SSgA

S&P 500

®

Index Fund Option

Putnam High Yield Trust Option

Putnam Income Fund Option

Federated U.S. Government Securities Fund: 2

5 years Option

Capital preservation money market: Putnam Money Market Fund Option*

Build your own portfolio with a range of choices

*

Although a money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund. Money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other governmental agency.

The plan involves investment risk, including the loss of principal.

Slide18

Absolute Return FundsPutnam 529 for America is the only 529 account to offer a suite of absolute return funds as an investment option

The funds target positive 3-year returns of 1%, 3%, 5%,

or 7% above the return on T-bills and with lower relative volatility

Absolute return investing can

be an ally in helping to navigate today’s market volatility

Chart does not represent the performance of Putnam Absolute Return Funds. Actual performance can be found on putnam.com.

The

funds’ strategies are designed to be largely independent of market direction, and the funds are not intended to outperform stocks and bonds during strong market rallies. There is no guarantee that the funds will meet their objectives.

+7%

+5%

+3%

+1%

®

®

®

®

Slide19

Putnam Absolute Return Funds

Putnam

Absolute Return 100 Fund

®

option

Putnam

Absolute Return 300 Fund® option

Putnam

Absolute Return 500 Fund

®

option

Putnam

Absolute Return 700 Fund

®

option

For investors considering short-term securities. Invests in bonds and cash instruments.

For investors considering a bond fund. Invests in bonds and cash instruments.

For investors considering a balanced fund. Can invest in bonds, stocks, or alternative asset classes.

For investors considering a stock fund. Can invest in bonds, stocks, or alternative asset classes.

Consider these risks before

investing:

Our

allocation of assets among permitted asset categories may hurt performance. The prices of stocks and bonds in the funds’ portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including both general financial market conditions and factors related to a specific issuer or industry. Our active trading strategy may lose money or not earn a return sufficient to cover associated trading and other costs. Our use of leverage obtained through derivatives increases these risks by increasing investment exposure. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Interest-rate risk is greater for longer-term bonds, and credit risk is greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have ongoing fees and expenses. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. International investing involves certain risks, such as currency fluctuations, economic instability, and political developments. Additional risks may be associated with emerging-market securities, including illiquidity and volatility. Our use of derivatives may increase these risks by increasing investment exposure (which may be considered leverage) or, in the case of many over-the-counter instruments, because of the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. The funds may not achieve their goal, and they are not intended to be a complete investment program. The funds’ effort to produce lower-volatility returns may not be successful and may make it more difficult at times for the fund to achieve their targeted return. In addition, under certain market conditions, the funds may accept greater volatility than would typically be the case, in order to seek their targeted return

.

For

the 500 Fund and 700 Fund these risks also apply

: REITs involve the risks of real estate investing, including declining property values. Commodities involve the risks of changes in market, political, regulatory, and natural conditions. Additional risks are listed in the funds’ prospectus. You can lose money by investing in the funds.

Slide20

Slide21

$500 monthly contributions at a hypothetical 6% annual growth rate

5 years

10 years

18 years

$163,477

Hypothetical

taxable

account value

$193,677

Hypothetical

529

account value

$81,940

$75,007

$34,885

$33,446

Your savings accumulate faster because account

is not taxed

This example assumes contributions of $500 per month, a hypothetical 6% nominal rate of return compounded monthly with an effective return of 6.17%, and a 28% tax bracket for the taxable account.

Performance shown is for illustrative purposes and is not related to an actual investment. Regular investing does not ensure a profit or protect against loss in a declining market. Capital gains, exemptions, deductions, and local taxes are not reflected. Certain returns in a taxable account are subject to capital gains tax, which is generally a lower rate than ordinary income tax rates and would make the investment return for the taxable investment more favorable than reflected on the chart. Investors should consider their personal investment horizon and income tax brackets, both current and anticipated, when making an investment decision. These may further impact the results of the comparison.

Slide22

The Smith family waits 10 years

to start saving, contributing

$1,219

every month

Total contribution

$117,024

The Jones family starts saving today, contributing

$340

every month

Total contribution

$73,440

Start early, contribute often

This chart is for illustrative purposes only and is not intended to be representative of past or future performance.

The Jones family saves $340 monthly for 18 years. The Smith family saves $1,219 monthly for 8 years. Assumes a hypothetical 8% annual return compounded monthly.

Earnings

$89,714

Account value

$163,154

after 18 years

Earnings

$46,130

Account value

$163,154

after 8 years

Slide23

The Jones grandfather makes an initial contribution of

$14,000

Total

contribution

$62,816

The Jones parents contribute

$226

every month

Let the whole family contribute

This chart is for illustrative purposes only and is not intended to be representative of past or future performance.

The Jones grandfather makes a lump-sum contribution of $14,000 today. The Jones parents contribute $226 each month.

Assumes a hypothetical 8% annual return compounded monthly.

Earnings

$104,491

Account value

$167,307

after 18 years

Slide24

Slide25

  A gift of $70,000 in

2016

would constitute five

years’

worth of gifts. Additional gifts made for the same beneficiary in the same five-year period would be subject to federal gift taxes. Election is made by filing a federal gift tax return. If the electing contributor dies during the 5-year period, amounts allocable to year after death are inducible in the contributor’s gross estate.* Contribution limit as of 1/1/16. Subject to periodic review.How much can you contribute?No minimum investmentContributions can occur until the account value reaches $370,000

*Contribute five years’

worth of gifts in a single year

Slide26

Many ways to contributeInvest a lump sumEstablish a dollar cost averaging programEstablish a systematic investment program

from your bank

Encourage contributions with gift certificates

Systematic investing and dollar cost averaging do not assure a profit or protect against loss in a declining market. You should consider your ability to continue investing during periods of low prices.

Slide27

Withdrawals are easyYou tell us how tomake out the checkMail the completed form

to Putnam Investments

Withdrawals of earnings not used to pay for qualified higher education expenses are subject to tax and a 10% penalty. State taxes may apply.

Slide28

Contact [insert broker name]

Call 1-877-PUTNAM529

Visit putnam.com/529

Slide29

Putnam 529 for America is sponsored by the State of Nevada, acting through the Trustees of the College Savings Plans of Nevada and the Nevada College Savings Trust Fund. Anyone may invest in the plan and use the proceeds to attend school in any state.

Before investing, consider whether your state's plan or that of your beneficiary offers state tax and other benefits not available through Putnam 529 for America.

If you withdraw money for something other than qualified higher education expenses, you will owe federal income tax and may face a 10% federal tax penalty on earnings. Consult your tax advisor.

You should carefully consider the investment objectives, risks, charges, and expenses of the plan before investing. Ask your financial representative or call Putnam at 1-877-PUTNAM529 for an offering statement and/or fund prospectus

containing this and other information for Putnam 529 for America, and read it carefully before investing.Putnam Retail Management, principal underwriter and distributorPutnam Investment Management, investment manager

Slide30

Not FDIC Insured

May Lose Value

No Bank Guarantee

Delete

They are the faces of the future