Aim High

Aim High
For Higher Education
Edvest: Wisconsin’s 529 College Savings Plan
3
Aim High for your Child’s Future
4
How Edvest Works
5
Edvest Offers Tax Advantages
6
Edvest is Flexible to Use
7
Investment Options
8
Choose your Own Investment Strategy
9
Age-Based Investment Options
10 Multi-Fund Investment Portfolios
11 Single Fund Investment Options
12 Your Questions Answered
13 Still Have Questions?
14 An Education Plan is Important. Choosing the Right One for you is Essential.
2 Edvest.com | (888) 338-3789
Aim High for your Child’s Future
As a parent, you want to give your child or loved one a good education and
a strong future. Higher education offers students a chance to open their minds,
acquire knowledge and develop skills. Whether a four-year college, community
college or technical school, higher education can translate into higher earning
power and steadier employment throughout one’s career.
Students need to be prepared educationally and financially for higher education. Without help,
many students could graduate with unwanted debt, potentially limiting their ability to buy a first
home, provide for their families and save for retirement.
But saving for college doesn’t have to be overwhelming. There are a variety of resources you can
tap. Ask relatives, such as grandparents, for support, since a cash gift for college can have a lasting
and meaningful effect. In addition, the Edvest College Savings Plan can help. With tax advantages,
gift ideas, low fees and automatic contribution plans, Edvest’s flexible features can go a long way
toward helping you achieve your college savings goals.
Visit our website at Edvest.com. Check out other online resources designed to help families plan for
higher education. These include: Studentaid.ed.gov and Edpubs.gov.
Higher Earnings
Expected Full-Time Lifetime Earnings Relative to High School Graduates, by Education Level
3.50
2.92
3.00
2.43
Earnings Ratio
2.50
1.96
2.00
1.65
1.50
1.00
1.00
1.13
1.27
0.72
0.50
0.00
Less than a
High School
Diploma
High School
Diploma
Some College,
No Degree
Associate
Degree
Bachelor’s
Degree
Master’s
Degree
Doctoral
Degree
Professional
Degree
Education Level
Source: The College Board, Education Pays 2013. http://trends.collegeboard.org
Note: Based on the sum of median 2011 earnings for full-time year-round workers at each age from 25 to 64 for
each education level. No allowance is made for the shorter work life resulting from time spent in college or out
of the labor force for other reasons. Future earnings are discounted at a 3% annual rate to account for the reality
that because of forgone interest, dollars received in the future are not worth as much as those received today.
Discounting does not have a large impact on the lifetime earnings ratios. The calculations are illustrative and do
not represent what individuals will actually earn in the future. Earnings ratios calculated using data from another
year will likely yield slightly different results. For example, the earnings ratio of bachelor’s degree recipients to high
school graduates is 1.61 based on 2005 earnings data, 1.66 based on 2008 earnings data, and 1.65 based on 2011
earnings data. Sources: U.S. Census Bureau, 2012, Table PINC-03; calculations by the authors.
3 Edvest.com | (888) 338-3789
Ready to Enroll?
Two Easy Ways:
•
Online at Edvest.com
•
Complete and mail the
enclosed application,
along with your initial
contribution, to:
Regular mail:
Edvest College Savings Plan
P.O. Box 55189
Boston, MA 02205-5189
Overnight mail:
Edvest College Savings Plan
30 Dan Road
Canton, MA 02021-2809
•
We’re here to help. Call us
toll-free at (888) 338-3789.
•
Please read the Plan
Disclosure booklet carefully
before opening an account.
How Edvest Works
Edvest is a 529 college
savings plan
The number 529 refers to
the federal tax code section
that provides federal tax
advantages for qualified
tuition savings programs.
401(k) plans are named after
a federal tax code section as
well. A 401(k) plan helps you
save for retirement. A 529
college savings plan helps
you save for college.
Who can Open an Account?
The Edvest College Savings Plan is open to everyone. Parents, grandparents, friends and relatives
at any income level can open an account for anyone. You can even open an account for yourself.
Plus, more than one person can contribute to a single account.
Minimum Contribution
Open an account with as little as $25 per investment portfolio, and make additional contributions
of at least $25. If your employer allows direct deposit from paychecks, the minimum contribution
is $15 per investment portfolio per pay period.
Maximum Account Balance
The lifetime maximum account balance limit per beneficiary is $440,300*. An account may continue
to grow beyond the maximum account balance limit, but no further contributions will be allowed.
Starting Early can Help
The sooner you start saving the more time your money has to grow. Opening an account when
your loved one is a baby means that your money has up to 18 years to grow!
Encourage Support
From Others
Grandparents, other relatives
and friends may give your
child gifts on birthdays and
other occasions. Tell them
you have opened an Edvest
account for your child. Ask if
they would be willing to give
just a small toy or book, for
example, and use the rest as
a cash contribution toward
college savings. If they are
Wisconsin residents they may
qualify for state tax
advantages.
Even Small Contributions can be Meaningful
Any amount of money that you add to your account each month, even the minimum,
can lead to a stronger future for your child.
$100,000
Monthly Contribution
■ $50
■ $100
■ $200
60,000
20,000
0
6 Years
12 Years
18 Years
Years of Accumulation
This hypothetical example illustrates the future values of different regular monthly investments for different time
periods and assumes an annual investment return of 6% with an initial investment of $5,000. It is hypothetical and
presented for illustrative purposes only and does not reflect actual performances or predict future results of Edvest.
It does not reflect the benefits of any Wisconsin or federal tax benefits or withdrawals. Actual results will vary with
market conditions. Past performance does not predict future results.
* Effective January 4, 2016 and subject to annual escalation. Please visit Edvest.com or call (888) 338-3789 for the current maximum account balance.
4 Edvest.com | (888) 338-3789
Edvest Offers Tax Advantages
Save on Federal and State Taxes
O Website Tip!
Contributions to the Edvest College Savings Plan may reduce a Wisconsin
resident’s state taxable income each year*. Plus, any account earnings will be free
from federal and Wisconsin state income tax, provided withdrawals are used for
qualified higher education expenses. Limitations, restrictions and/or recapture
provisions may apply. See the Disclosure Booklet for details.
How much will college cost?
Federal Estate and Gift Tax Benefits
Contributions to Edvest may reduce the taxable value of your estate. For example, money placed in
a grandchild’s Edvest account, together with all the other gifts you give that grandchild in one year, may
qualify for an annual federal gift tax exclusion of $14,000. Ask your tax advisor about your own situation.
Couples filing jointly can contribute up to $140,000 per child and take advantage of up to five years’
worth of tax-free gifts at one time ($70,000 for individual filers). Completed gifts are removed from
your estate for tax purposes, so your investment goes toward a child’s education, not taxes. Consult
your tax advisor about your situation.
When you go to Edvest.com,
check out our College Savings
Calculator. The calculator
projects college costs in your
child’s or loved one’s time
frame and calculates how
much more you need to save
on a periodic basis to meet
those costs. The Planner
includes a college cost
database with approximately
3,800 colleges. Be sure to use
the College Savings Planner at
least once a year to make sure
you’re on track to meet your
college savings goals.
Advantages of Tax-Free Growth Potential
The money that you add to your account each month can lead to a stronger future for your child.
This example assumes an initial
investment of $5,000, monthly
contributions of $100 and a
hypothetical 6% annual rate of return
over 18 years. The taxable account
assumes a 28% federal and 5%
state tax rate. The illustration does
not represent the performance of
any specific investment portfolio.
Results may vary with general market
conditions and are not guaranteed.
Past performance does not predict
future results.
* The maximum contribution amount eligible for reducing a Wisconsin resident’s 2016 state taxable income is $3,100 per beneficiary. Beginning in 2014, new rules allowed
for greater amounts, based on an inflation calculation as well as the opportunity for contributions greater than the eligible amount each year to be used for subsequent years’
state tax benefits until exhausted. Please see Edvest.com or call (888) 338-3789 for the current amount.
5 Edvest.com | (888) 338-3789
Edvest is Flexible to Use
O Website Tip!
You can Use Edvest Funds:
With online access to your
Edvest account, you can:
•
At thousands of eligible educational institutions nationwide and at many abroad—
including technical colleges, colleges and universities, graduate schools, and professional
schools and certification programs.
•
For tuition, fees, books, supplies and equipment required for enrollment or attendance
at an eligible educational institution.
•
For certain room and board expenses.
•
For computers/tablets, hardware, software, printers, Internet access and related
technology services when used primarily by the beneficiary when enrolled at an
eligible educational institution.
•
Get account information
•
Make contributions
•
Start an Automatic
Contribution Plan (ACP)
•
Sign up for eDelivery
of your statements and
disclosure materials
•
Request withdrawals for
deposit to your bank
account on file and even
send funds directly to your
beneficiary’s school
•
•
Download account data
into Quicken®
All of this, and more
can be done with your
smartphone, tablet
or computer.
Who Controls the Money
As the account owner:
•
You maintain complete control of the account regardless of your beneficiary’s age.
•
You make the decisions from selecting the Edvest investment portfolios to withdrawing funds
from your account.
•
You can name a successor account owner and transfer ownership to another person.
You can Change Beneficiaries
•
If your loved one does not need all the money or has other funding options such as a scholarship,
you may transfer funds in your account tax free to other eligible family members of the original
beneficiary, including siblings, a spouse and even a first cousin. See the Disclosure Booklet for
more information.
•
You can roll the money over from another 529 college savings plan into your Edvest account and
take advantage of all the benefits of Edvest.
Note: Transfers and rollovers to another 529 plan may be subject to differences in features, costs
and surrender charges. Indirect transfers may be subject to taxation and penalties. Consult your tax
advisor about your own situation.
Low Fees
The Edvest College Savings Plan has no application, sales or account maintenance fees. Low fees
mean more of your money goes to work toward future college expenses. For more information,
refer to the Fee Table in the enclosed Disclosure Booklet.
Edvest’s Program Manager: TIAA-CREF Tuition Financing, Inc.
TIAA-CREF Tuition Financing, Inc. (TFI), part of the TIAA group of companies, is a leader
in 529 college savings plan management. TFI provides program management services
for Edvest. TIAA-CREF Individual and Institutional Services, LLC, member FINRA, is the
distributor and underwriter for Edvest. TIAA has combined assets under management
of $854 billion as of December 31, 2015. TIAA is a national financial services group of
companies and a leading provider of retirement services in the academic, research,
medical and cultural fields.
* Based on assets under management across Nuveen Investments affiliates and TIAA
investment management teams as of December 31, 2015.
6 Edvest.com | (888) 338-3789
Investment Options
You can direct your contributions to any one or a combination of Edvest’s
17 investment options. These vary in investment strategy and degree of risk,
so you can choose an option or combination of options that’s right for you.
Re-examine your
Edvest account if:
•
Your goals, time period for
college investing or personal
financial situation change.
•
Long-term changes in
the economy will affect
how you save or invest.
•
The balance in your
account changes
significantly due to varying
performance of different
investment portfolios.
Why Risk is Important
Each investment portfolio has its own risks.
•
Investments in growth stocks may be more volatile than other securities.
•
Fixed income investing poses credit and interest rate risks; when interest rates rise,
bond prices generally fall and the underlying fund’s share price can fall.
•
Investment returns over your investment period could be lower than the rate of increase
in higher education costs.
•
International investing involves special risks­­— currency, political, social and economic.
•
You could lose all or part of the value of your account.
Edvest Offers Broad Categories of Investment Options
Two Age-Based Investment Options­­— including an Aggressive Option.
There are nine age bands in each Age-Based Investment Option, which automatically shift to a
more conservative risk level as the beneficiary gets older.
•
You can transfer from
one portfolio to another
twice per calendar year.
You can transfer money
among portfolios if you are
changing the beneficiary
of the account.
Multi-Fund Investment Portfolios.
–– Three index-based portfolios.
–– Three active-based portfolios.
–– International Equity Index Portfolio
–– Balanced Portfolio
•
Single Fund Investment Options — Five portfolios that invest solely in shares of a single underlying fund.
•
Stable Principal Investment Options.
–– Bank CD Portfolio
–– Principal Plus Interest Portfolio
7 Edvest.com | (888) 338-3789
Choose Your Own Investment Strategy
Age-based investments are very popular, but if you prefer to construct your own
asset allocation, you can pick investment portfolios that more directly match
your tolerance for risk, your time horizon or other factors. Unlike the Age-Based
Options, however, your unique investment allocation won’t automatically
change as the child ages.
The more you invest and the earlier you start the more opportunity your money has to grow.
•
Calculate how much you need to save.
•
Set your goals.
•
Set up an automatic contribution plan (ACP) and have your contributions electronically sent from
your bank account to your Edvest account.
•
Contribute through payroll deduction if your employer offers it.
8 Edvest.com | (888) 338-3789
Age-Based Investment Options
Contributions to the Age-Based Options will be placed in one of nine age bands
(depending upon the age of your beneficiary), each of which has a different
investment objective and investment strategy. As the child gets closer to college,
assets are automatically shifted to a more conservative allocation.
Edvest offers both an Age-Based Investment Option and an Aggressive Age-Based Investment
Option. Allocations for the Age-Based Investment Option are illustrated below. The Aggressive
Age-Based Investment Option has similar allocations except each age band will invest a larger
percentage of its assets in mutual funds that invest primarily in equity securities (including real
estate securities) and a smaller percentage in mutual funds that invest primarily in debt securities.
Asset Allocations for the Age-Based Option
Age 0–4
W74.40% Equities
W 5.60% Real Estate
W20.00% Bonds
Age 11–12
W46.50% Equities
W 3.50% Real Estate
W50.00% Bonds
Age 16
W23.25% Equities
W 1.75% Real Estate
W75.00% Bonds
9 Edvest.com | (888) 338-3789
Age 5–8
W65.10% Equities
W 4.90% Real Estate
W30.00% Bonds
Age 13–14
W 37.20% Equities
W 2.80% Real Estate
W60.00% Bonds
Age 17
W18.60% Equities
W 1.40% Real Estate
W80.00% Bonds
Age 9–10
W55.80% Equities
W 4.20% Real Estate
W40.00% Bonds
Age 15
W 27.90% Equities
W 2.10% Real Estate
W70.00% Bonds
Age 18+
W13.95% Equities
W 1.05% Real Estate
W75.00% Bonds
W10.00% Money Market
O Website Tip!
Compare College
Savings Options
Go to Edvest.com and use
our tool for comparing many
popular ways to save for
college. See how custodial
accounts (UGMA/UTMA),
Coverdell Education Savings
Accounts, and 529 college
savings plans differ.
Multi-Fund Investment Portfolios
If you don’t want the automatic asset-allocation shift that age-based options provide, but you do want
broad diversification, a multi-fund portfolio may be desirable to you. You may select among three index-based
and three active-based portfolios.
Index-Based Portfolios
Investment Objective and Strategy
Index-Based
Aggressive Portfolio
Seeks a favorable long-term total return, mainly through capital appreciation. Invests in a
combination of index mutual funds that consist of domestic equities, international equities,
fixed income and REITs, with an emphasis on mutual funds investing in equities.
Index-Based
Moderate Portfolio
Seeks moderate growth by investing in a combination of index mutual funds that consist of
domestic equities, international equities, fixed income and REITs.
Index-Based
Conservative Portfolio
Seeks to provide moderate long-term total return mainly though current income by investing
in a combination of index mutual funds that consist of domestic equities, international equities,
fixed income and REITs, with an emphasis on mutual funds investing in fixed income.
Active-Based Portfolios
Investment Objective and Strategy
Active-Based
Aggressive Portfolio
Seeks a favorable long-term total return, mainly through capital appreciation. Invests in a
combination of actively-managed mutual funds that consist of domestic equities, international
equities, fixed income and REITs, with an emphasis on mutual funds investing in equities.
Active-Based
Moderate Portfolio
Seeks moderate growth by investing in a combination of actively-managed mutual funds that
consist of domestic equities, international equities, fixed income and REITs.
Active-Based
Conservative Portfolio
Seeks to provide moderate long-term total return mainly through current income by investing in
a combination of actively-managed mutual funds that consist of domestic equities, international
equities, fixed income and REITs, with an emphasis on mutual funds investing in fixed income.
Additional Portfolios
Investment Objective and Strategy
International Equity
Index Portfolio
Seeks to provide a favorable long-term total return, mainly through capital appreciation.
Balanced Portfolio
Seeks to provide a favorable long-term total return through capital appreciation and income.
10 Edvest.com | (888) 338-3789
Single Fund Investment Options
You may want to use one or more Portfolios that invest in a single mutual fund, particularly if you have other
college savings outside of Edvest and want to fine-tune your investment strategy.
Single Fund Portfolios
Investment Objective and Strategy
Large-Cap Stock
Index Portfolio
Seeks a favorable long-term total return, mainly from capital appreciation. Invests 100% of its assets
in the TIAA-CREF S&P 500 Index Fund, which attempts to track a benchmark index.
U.S. Equity Active Portfolio
Seeks long-term capital appreciation. Invests 100% of its assets in the DFA U.S. Core Equity 1
Portfolio, an actively managed mutual fund investing in a broad and diverse group of common
stocks of U.S. companies with a greater emphasis on small-cap and value companies.
Social Choice Portfolio
Seeks a favorable long-term total return that reflects the investment performance of the overall
U.S. stock market while giving special consideration to certain social criteria. Invests 100% of its
assets in the TIAA-CREF Social Choice Equity Fund, an actively-managed mutual fund.
Small Cap Index Portfolio
Seeks a favorable long-term total return, mainly from capital appreciation. Invests 100% of its assets
in the TIAA-CREF Small-Cap Blend Index Fund, which attempts to track a benchmark index.
Bond Index Portfolio
Seeks to provide current income along with a moderate long-term rate of return. Invests 100% of
its assets in the TIAA-CREF Bond Index Fund, which attempts to track a benchmark index.
Stable Principal Investment Options
Want to be conservative? Edvest offers two portfolios that seek preservation of capital.
Portfolio
Investment Objective and Strategy
Bank CD Portfolio
Seeks income consistent with the preservation of principal by investing primarily in CDs, with a
maturity not to exceed 24 months, insured by the FDIC and issued by banks with a main, home, or
branch office located in Wisconsin (“Eligible Banks”). Interest rates payable on the underlying CDs
will be set by the issuing Eligible Banks based on current market conditions and are not uniform.
Principal Plus
Interest Portfolio
Seeks to preserve capital and provide a stable return. Assets are allocated to a Funding
Agreement issued by TIAA-CREF Life to the College Savings Program Trust Fund on behalf of
the Plan. The Funding Agreement provides a minimum guaranteed rate of return and allows for
the possibility that additional interest may be credited. See Edvest.com for the current effective
annual interest rate.
11 Edvest.com | (888) 338-3789
Your Questions Answered
1. Who can open an account?
Anyone can open an account regardless of income. This
includes parents, grandparents, friends or relatives. Account
owners must be a United States citizen or resident alien of
legal age with a valid Social Security Number or federal
Taxpayer Identification Number.
7. Will an Edvest account hurt my child’s or loved one’s
chances for financial aid?
•
If the parent is the account owner, the account assets will
be treated as belonging to the parent for federal financial
aid purposes.
•
If a dependent child is the account owner, or the
beneficiary of an account holding UGMA/UTMA assets,
account assets are treated as a parent asset for financial
aid purposes.
•
Financial aid policies vary across post-secondary
institutions, so check with the institution directly for more
information.
2. Who can be an account beneficiary?
As the owner of the account, you can designate anyone as
beneficiary ­— even yourself. The beneficiary must have a valid
Social Security Number or federal Taxpayer Identification
Number. Only one person may be listed as beneficiary for
each account.
3. Can more than one person contribute to the account?
Anyone can contribute to an account as long as the
account balance does not exceed the maximum balance
limit of $440,300 per beneficiary*. The account owner
has sole control over the assets and decides when to
withdraw them.
4. Can I change the beneficiary?
You can change your beneficiary at any time or transfer
a portion of your investment to a different beneficiary.
The new beneficiary must be an eligible member of the
previous beneficiary’s family ­— a sibling, for example.
See the Disclosure Booklet for more information.
5. What if my child or loved one decides not to
attend college?
You have three choices. You can:
•
Keep the funds in the account. The investments will
be available in future years if the beneficiary changes
his or her mind about school.
•
Change the beneficiary to an eligible family member.
Consult your tax advisor about whether this may create
a taxable gift.
•
Make a non-qualified withdrawal. Any earnings will be
subject to federal income tax and any applicable state
income tax, as well as an additional 10% federal tax.
6. Can friends and family contribute too?
Friends and family can contribute to your child’s
Edvest account in several ways: by check, by opening
& funding their own account for the child or with an
eGift. Visit www.edvest.com/gift to learn more.
8. What if my child or loved one receives a full or
partial scholarship?
If the student receives a scholarship that covers the cost of
qualified higher education expenses, you can withdraw up to
the scholarship amount free of the 10% additional federal tax.
However, the earnings portion of the withdrawal is subject to
federal and Wisconsin income tax.
9. If I leave Wisconsin what will happen to my account?
If you move to another state you can still keep your money
invested in your Edvest account and you can continue
contributing to it. Remember, before investing in another
529 college savings plan, consider whether the state in
which you or your designated beneficiary resides has a 529
college savings plan that offers favorable state income tax
or other benefits that are available only if you invest in that
state’s 529 college savings plan.
10. Can I roll over funds from another 529 college savings
plan into Edvest?
You can transfer funds for the same beneficiary every twelve
months without triggering tax consequences. Remember,
the 529 college savings plan from which you transfer funds
may be subject to differences in features, costs and surrender
charges. Consult your tax advisor or the other 529 college
savings plan provider before requesting a rollover.
11. How do I make withdrawals?
It’s easy to withdraw funds when your beneficiary is ready
for college. Withdrawals can be processed online from your
computer or mobile device, by completing and submitting a
Withdrawal Request Form or by calling (888) 338-3789.
* Effective January 4, 2016 and subject to annual escalation. Please visit Edvest.com or call (888) 338-3789 for the current maximum account balance.
12 Edvest.com | (888) 338-3789
Still Have Questions?
•
Visit Edvest.com for more information on the features and benefits of Edvest.
•
all toll free: (888) 338-3789 Monday through Friday from 7:00 a.m. until 7:00 p.m. CT. One of our
C
college savings plan specialists will answer your questions.
13 Edvest.com | (888) 338-3789
An Education Savings Plan is Important.
Choosing the Right One for you is Essential.
Open Your Edvest
Account Today
•
•
•
Online: Edvest.com.
Select “Open an Account”.
Mail: Complete and sign
the Edvest Account
Application and return with
your initial contribution in
the enclosed envelope.
Download, complete and
sign the Edvest Account
Application and mail with
your initial contribution.
14 Edvest.com | (888) 338-3789
The Edvest College Savings Plan Offers these Advantages:
•
Tax-deferred growth potential
•
Plan contributions may reduce Wisconsin taxable income
•
Tax-free withdrawals for qualified education expenses
•
Gift- and estate-tax benefits
•
se funds for tuition, fees, supplies, required equipment, certain room
U
and board expenses, computers/tablets, hardware, software, printers, internet
access, and related technology services.
•
Low minimum contributions, high account maximum
•
Low fees
•
amily and friends may contribute and potentially qualify to reduce their
F
Wisconsin taxable income
Edvest.com (888) 338-3789
edvestconnection.com
Consider the investment objectives, risks, charges and expenses before investing in the Edvest College Savings Plan.
Please call toll-free 1-888-338-3789 or visit www.Edvest.com for a Plan Disclosure Booklet containing this and other
information. Read it carefully. Investments in the Plan are neither insured nor guaranteed and there is the risk of
investment loss.
Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or
have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available
if you invest in that state’s 529 plan.
Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.
Non-qualified withdrawals may be subject to federal and state taxes and the additional federal 10% tax.
The Edvest 529 College Savings Plan is offered by the State of Wisconsin. TIAA-CREF Tuition Financing, Inc. (TFI)
is the Plan Manager. TIAA-CREF Individual & Institutional Services, LLC, member FINRA, is the distributor and
underwriter for Edvest.
Neither TIAA-CREF Tuition Financing, Inc., nor its affiliates, are responsible for the content found on any external website
links contained herein. All Edvest social media platforms are managed by the State of Wisconsin.
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