New York’s   529   College Savings Program  Direct Plan Be Ready When the Bell Rings for College
Today’s Agenda <ul><li>The goal of college </li></ul><ul><li>How New York’s 529 College Savings Program  Direct Plan  can ...
The cost of college may be rising… Estimated Cost of One Year at College
… but there is hope. <ul><li>Most students receive some form of financial aid – either grants, scholarships, work-study or...
Today’s Agenda <ul><li>The goal of college </li></ul><ul><li>How New York’s 529 College Savings Program  Direct Plan  can ...
A Partnership for New York Investment Management  By: The Vanguard Group Program Management  By: Upromise  Investments, In...
Before and After the Transition from TIAA <ul><li>On November 14, 2003, all Program accounts and assets previously managed...
Key Features and Benefits of the Program <ul><li>Significant Federal and State Tax Advantages </li></ul><ul><li>Broad Elig...
Federal and State Tax Considerations <ul><li>Only 529 program to offer New York taxpayers a State tax deduction </li></ul>...
Broad Eligibility and Flexibility <ul><li>Any U.S. citizen or resident alien </li></ul><ul><li>Parents, grandparents, rela...
Federal and State Tax Considerations <ul><li>Non-qualified withdrawals subject to federal and State taxes </li></ul><ul><u...
Low Fees, Low Minimums, and High Maximum <ul><li>One of the Lowest Management Fees of Any 529 Plan </li></ul><ul><ul><li>0...
Professional Investment Management by Vanguard <ul><li>One of the Most Trusted Investment Management Companies </li></ul><...
3 Age-Based Vanguard Investment Options <ul><li>Conservative, moderate, and aggressive options  </li></ul><ul><li>Contribu...
12 Vanguard Individual Portfolios <ul><li>5 Stock Portfolios (100% stock funds) </li></ul><ul><ul><li>Aggressive Growth Po...
Today’s Agenda <ul><li>The goal of college </li></ul><ul><li>How New York’s 529 College Savings Program  Direct Plan  can ...
Additional Savings with Upromise ®  Rewards <ul><li>Upromise Rewards is a free, optional service that can add to your savi...
Save for College at the Grocery Store …  at your favorite New York grocery store (over 1,000 participating stores). Get mo...
From Everyday Expenses to Big Purchases <ul><li>Over 9,000 restaurants  </li></ul><ul><li>Over 7,000 Hotels </li></ul><ul>...
Today’s Agenda <ul><li>The goal of college </li></ul><ul><li>How New York’s 529 College Savings Program  Direct Plan  can ...
Financial Aid and Other Considerations <ul><li>State and Federal Financial Aid Consideration </li></ul><ul><ul><li>Program...
No Guarantee & Other Important Program Disclosure New York's 529 College Savings Program  Direct Plan  is described in the...
Today’s Agenda <ul><li>The goal of college </li></ul><ul><li>How New York’s 529 College Savings Program  Direct Plan  can ...
We’re Here to Help!!   <ul><li>Visit  www.nysaves.org   to learn more about the Program, request an information kit, and e...
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New York's 529 College Savings Program Direct Plan

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New York's 529 College Savings Program Direct Plan

  1. 1. New York’s 529 College Savings Program Direct Plan Be Ready When the Bell Rings for College
  2. 2. Today’s Agenda <ul><li>The goal of college </li></ul><ul><li>How New York’s 529 College Savings Program Direct Plan can help </li></ul><ul><li>Additional savings through Upromise ® Rewards </li></ul><ul><li>Important considerations </li></ul><ul><li>To learn more… </li></ul>
  3. 3. The cost of college may be rising… Estimated Cost of One Year at College
  4. 4. … but there is hope. <ul><li>Most students receive some form of financial aid – either grants, scholarships, work-study or student loans. </li></ul><ul><li>In 2002-2003, total aid per full-time equivalent student averaged about $9,100 ($3,600 of which was in grant aid) † . </li></ul>† The College Board, Trends in Student Aid 2003. <ul><li>There are more ways than ever to save for college and more federal and state tax benefits for doing so. </li></ul><ul><li>Congress has enabled states to create savings plans under Section 529 of the Internal Revenue Code. </li></ul><ul><li>Each State can develop its own unique program. </li></ul>
  5. 5. Today’s Agenda <ul><li>The goal of college </li></ul><ul><li>How New York’s 529 College Savings Program Direct Plan can help </li></ul><ul><li>Additional savings through Upromise ® Rewards </li></ul><ul><li>Important considerations </li></ul><ul><li>To learn more… </li></ul>
  6. 6. A Partnership for New York Investment Management By: The Vanguard Group Program Management By: Upromise Investments, Inc. Office of the State Comptroller (OSC) Alan G. Hevesi State Comptroller Higher Education Services Corporation (HESC) George E. Pataki Governor
  7. 7. Before and After the Transition from TIAA <ul><li>On November 14, 2003, all Program accounts and assets previously managed by TIAA-CREF transitioned to Upromise and Vanguard. </li></ul>0.60% of assets 0.60% of assets Management Fee Online capability for most frequent transactions Paper forms available online Online Account Management Same <ul><li>Single filer: up to $5,000 per year </li></ul><ul><li>Married filing jointly: up to $10,000 per year </li></ul>New York State Income Tax Deduction 15 Options 4 Options Investment Options The Vanguard Group TIAA Investment Manager Upromise Investments, Inc. Teachers Insurance and Annuity Association (TIAA) Program Manager After Before
  8. 8. Key Features and Benefits of the Program <ul><li>Significant Federal and State Tax Advantages </li></ul><ul><li>Broad Eligibility and Flexibility </li></ul><ul><li>Low Fees and Minimums, High Contribution Limit </li></ul><ul><li>Professional Investment Management by Vanguard </li></ul><ul><li>Additional Savings through the Free Upromise ® Rewards Service </li></ul><ul><li>Convenient Online Account Opening and Account Management </li></ul>
  9. 9. Federal and State Tax Considerations <ul><li>Only 529 program to offer New York taxpayers a State tax deduction </li></ul><ul><ul><li>Can deduct up to $5,000 of contributions on state income tax return each year ($10,000 for married couples filing jointly) </li></ul></ul>* Unless extended, federally tax-free treatment of qualified withdrawals will expire after December 31, 2010. <ul><li>Federal and State income tax-deferred growth </li></ul><ul><ul><li>Earnings grow federal and State income tax deferred until withdrawn </li></ul></ul><ul><li>Federal and State income tax-free qualified withdrawals for higher education* </li></ul><ul><ul><li>Withdrawals for tuition, fees, room and board, books, and required supplies </li></ul></ul><ul><ul><li>Any qualifying post-secondary institution in the U.S., including public and private colleges and universities, 2- and 4-year programs, and vocational schools </li></ul></ul>
  10. 10. Broad Eligibility and Flexibility <ul><li>Any U.S. citizen or resident alien </li></ul><ul><li>Parents, grandparents, relatives, and even friends </li></ul><ul><li>No age or income limitations </li></ul><ul><li>Multiple account owners can open accounts for the same beneficiary </li></ul><ul><li>Account owner retains control of how and when the money is used </li></ul>“ Account Owner” (Person Who Controls the Account) <ul><li>Any U.S. citizen or resident alien </li></ul><ul><li>Your children, yourself, your spouse, relatives, and even friends </li></ul><ul><li>No age or income limitations </li></ul><ul><li>Account owner can change beneficiaries to a qualifying family member of the current beneficiary without taxes or penalties </li></ul>“ Beneficiary” (Student for Whose Benefit the Account is Opened) If beneficiary does not attend college, account owner can: ( 1 ) leave the money in the account until a later date, ( 2 ) change beneficiaries, or ( 3 ) make a non-qualified withdrawal
  11. 11. Federal and State Tax Considerations <ul><li>Non-qualified withdrawals subject to federal and State taxes </li></ul><ul><ul><li>Subject to federal and State income tax on earnings, plus a 10% federal penalty tax on earnings </li></ul></ul><ul><ul><li>Any portion attributable to contributions for which a New York State tax deduction was previously claimed will be subject to New York personal income tax </li></ul></ul><ul><ul><li>Rollovers to another state’s 529 plan are considered non-qualified withdrawals for State income tax purposes </li></ul></ul><ul><li>Withdrawals Due to Death, Disability or Scholarship </li></ul><ul><ul><li>Subject to federal income tax on earnings, but not the 10% federal penalty tax </li></ul></ul><ul><ul><li>Withdrawals due to death or disability of beneficiary not subject to NY State tax </li></ul></ul><ul><ul><li>Withdrawals due to a beneficiary scholarship are subject to NY State tax to the extent they represent earnings and previously deducted contributions </li></ul></ul>
  12. 12. Low Fees, Low Minimums, and High Maximum <ul><li>One of the Lowest Management Fees of Any 529 Plan </li></ul><ul><ul><li>0.58% of your investment annually (no other fees) </li></ul></ul><ul><li>Low Minimum Contribution Amounts </li></ul><ul><ul><li>$25 minimum for initial and ongoing contributions (EFT or check) </li></ul></ul><ul><ul><li>$25 minimum for AIP (bi-monthly, monthly, quarterly) </li></ul></ul><ul><ul><li>$15 for contributions made through payroll deduction </li></ul></ul><ul><li>High Maximum Contribution Limit </li></ul><ul><ul><li>Contribute until the total balance of all Program accounts for the same beneficiary reaches an aggregate maximum, which is currently $235,000 (earnings can continue to accrue after reaching the maximum) </li></ul></ul>
  13. 13. Professional Investment Management by Vanguard <ul><li>One of the Most Trusted Investment Management Companies </li></ul><ul><ul><li>Largest pure no-load mutual fund company in the world </li></ul></ul><ul><ul><li>Over $600 Billion in assets under management </li></ul></ul><ul><ul><li>Commitment to high-value, low-cost investing and client service </li></ul></ul><ul><ul><li>Commitment to “plain talk” with customers </li></ul></ul><ul><li>15 Vanguard Investment Options for the Program </li></ul><ul><ul><li>3 age-based options and 12 individual portfolios </li></ul></ul><ul><ul><li>Choose up to 5 investment options per account </li></ul></ul><ul><ul><li>Reallocate among investments once per calendar year or when you change beneficiaries </li></ul></ul><ul><ul><li>Vanguard education investment specialists available to help </li></ul></ul>
  14. 14. 3 Age-Based Vanguard Investment Options <ul><li>Conservative, moderate, and aggressive options </li></ul><ul><li>Contributions are invested according to your risk tolerance and the age of your beneficiary </li></ul><ul><li>As your beneficiary ages, your assets are automatically shifted to more conservative investments to seek to protect your capital </li></ul>
  15. 15. 12 Vanguard Individual Portfolios <ul><li>5 Stock Portfolios (100% stock funds) </li></ul><ul><ul><li>Aggressive Growth Portfolio </li></ul></ul><ul><ul><li>Growth Stock Index Portfolio </li></ul></ul><ul><ul><li>Mid-Cap Stock Index Portfolio </li></ul></ul><ul><li>3 Balanced Portfolios (mix of stock and bond funds) </li></ul><ul><ul><li>Conservative Growth Portfolio </li></ul></ul><ul><ul><li>Growth Portfolio </li></ul></ul><ul><li>3 Bond Portfolios (100% bond funds) </li></ul><ul><ul><li>Bond Market Index Portfolio </li></ul></ul><ul><ul><li>Income Portfolio </li></ul></ul><ul><li>1 Interest Accumulation Portfolio (100% short-term investments) </li></ul><ul><ul><li>Small-Cap Index Portfolio </li></ul></ul><ul><ul><li>Value Stock Index Portfolio </li></ul></ul><ul><ul><li>Moderate Growth Portfolio </li></ul></ul><ul><ul><li>Inflation-Protected Securities Portfolio </li></ul></ul><ul><li>Choose from among these options if you wish to be more aggressive or more conserv-ative than the age-based options allow. </li></ul><ul><li>Unlike the age-based options, your allocation among individual portfolios will remain fixed until you instruct the Program to change it. </li></ul>
  16. 16. Today’s Agenda <ul><li>The goal of college </li></ul><ul><li>How New York’s 529 College Savings Program Direct Plan can help </li></ul><ul><li>Additional savings through Upromise ® Rewards </li></ul><ul><li>Important considerations </li></ul><ul><li>To learn more… </li></ul>
  17. 17. Additional Savings with Upromise ® Rewards <ul><li>Upromise Rewards is a free, optional service that can add to your savings </li></ul><ul><ul><li>Join Upromise for free through www.nysaves.org </li></ul></ul><ul><ul><li>Register your credit, debit, grocery and drug store cards </li></ul></ul><ul><ul><li>Get money back for college when you buy gas, dine out, shop online, buy groceries, and more </li></ul></ul><ul><ul><li>Link your Upromise Rewards account to your New York 529 account and have your Upromise savings transferred automatically on a periodic basis </li></ul></ul><ul><li>Hundreds of leading companies will help you save for college </li></ul>… and many more
  18. 18. Save for College at the Grocery Store … at your favorite New York grocery store (over 1,000 participating stores). Get money back for college on over 7,000 products… Just register your grocery cards with Upromise.
  19. 19. From Everyday Expenses to Big Purchases <ul><li>Over 9,000 restaurants </li></ul><ul><li>Over 7,000 Hotels </li></ul><ul><li>Circuit City </li></ul><ul><li>The Sharper Image </li></ul><ul><li>Bed Bath & Beyond </li></ul><ul><li>ADT </li></ul><ul><li>America Online </li></ul><ul><li>Many more… </li></ul>Save for college at over 50,000 stores, restaurants, and services <ul><li>Staples.com </li></ul><ul><li>KBtoys.com </li></ul><ul><li>Dell.com </li></ul><ul><li>Sears.com </li></ul><ul><li>Gap.com </li></ul><ul><li>Barnes & Noble.com </li></ul><ul><li>Walmart.com </li></ul><ul><li>JCPenney.com </li></ul><ul><li>Many more… </li></ul>Shop online through Upromise ® and save at over 200 online retailers <ul><li>Century 21 </li></ul><ul><li>Coldwell Banker </li></ul><ul><li>ERA </li></ul><ul><li>Chase Home Finance </li></ul><ul><li>CitiMortgage </li></ul><ul><li>Wachovia Mortgage </li></ul>Save more for college on big purchases
  20. 20. Today’s Agenda <ul><li>The goal of college </li></ul><ul><li>How New York’s 529 College Savings Program Direct Plan can help </li></ul><ul><li>Additional savings through Upromise ® Rewards </li></ul><ul><li>Important considerations </li></ul><ul><li>To learn more… </li></ul>
  21. 21. Financial Aid and Other Considerations <ul><li>State and Federal Financial Aid Consideration </li></ul><ul><ul><li>Program assets not included in New York State financial aid determination </li></ul></ul><ul><ul><li>Considered parental asset (not the student’s assets) for federal financial aid purposes if parent is the account owner – which means that a smaller percentage is considered available for federal financial aid purposes </li></ul></ul><ul><li>Hope and Lifetime Learning Credit Eligibility </li></ul><ul><ul><li>Qualified withdrawal will not impact eligibility for the Hope Scholarship or Lifetime Learning tax credits, provided that the withdrawal is not used for the same expenses for which the credit was claimed </li></ul></ul><ul><li>Special gift, estate, and generation skipping transfer tax considerations </li></ul><ul><ul><li>Contributions are considered completed gifts and are generally removed from the account owner’s estate </li></ul></ul><ul><ul><li>Can contribute up to $55,000 in a single year ($110,000 for married couples filing jointly) without federal gift, estate, or generation skipping transfer tax consequences, provided no more gifts are made to the beneficiary for 5 years </li></ul></ul>
  22. 22. No Guarantee & Other Important Program Disclosure New York's 529 College Savings Program Direct Plan is described in the current applicable Program Brochure and Tuition Savings Agreement. Accounts are opened by completing an Enrollment Form. All of these should be read carefully before opening an account. None of the State of New York, its agencies, the Federal Deposit Insurance Corporation (FDIC), The Vanguard Group, nor Upromise insures accounts or guarantees the principal deposited therein or any investment returns on any account or investment portfolio. The value of your account will vary based on market conditions and the performance of the investment options you select, and may be more or less than the amount you deposit. Tax benefits are subject to certain limitations and certain withdrawals are subject to federal, state and local taxes. If you are a resident or taxpayer of another state, you should consider whether that state offers a 529 Plan with tax or other benefits that are not available through this Program. You should consult your tax advisor. Investments may be made through Upromise Investments, Inc. and Vanguard Marketing Corporation, as distributors.     New York's 529 College Savings Program currently includes two separate 529 plans. The Direct Plan is sold directly by the Program. You may also participate in the Advisor Plan , which is sold exclusively through financial advisors and offers investment options that are not available under the Direct Plan . However, the fees and expenses of the Advisor Plan are higher and include financial advisor compensation. Be sure to understand the options available before making an investment decision.
  23. 23. Today’s Agenda <ul><li>The goal of college </li></ul><ul><li>How New York’s 529 College Savings Program Direct Plan can help </li></ul><ul><li>Additional savings through Upromise Rewards </li></ul><ul><li>Important considerations </li></ul><ul><li>To learn more… </li></ul>
  24. 24. We’re Here to Help!! <ul><li>Visit www.nysaves.org to learn more about the Program, request an information kit, and even enroll online. </li></ul><ul><li>Call 1-877-NYSAVES (1-877-697-2837) to speak with a Program representative at Vanguard. Monday through Friday, 8 a.m. to 9 p.m. </li></ul>
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