| 3EO017 281455 4/13Sources: The College Board, 2012–2013College costs are risingFour years of tuition and fees2012Public college $37,800Private college $127,100$157,8012030$362,800
| 4EO017 281455 4/13College debt is also rising• Student debt nationally has reached $1 trillion,higher than car loans or credit cards• Two thirds of the national college class of 2011finished school with loan debt• Average student debt: $26,600Sources: Federal Reserve Bank of New Yorks Quarterly Report on Household Debt, Q3 2012, Institutefor College Access & Success Project on Student Debt.,CNNmoney, October 18, 2012
| 5EO017 281455 4/13College still offerslife-long benefits• Linked to long-term social and physical wellness• Higher income over lifetime, depending upon majorselected• Decreased likelihood of unemployment* Lumina Foundation and Georgetown Universitys Center on Education and the Workforce, August 15, 2012.
| 6EO017 281455 4/13Help meetthe challengewith a529 plan
| 7EO017 281455 4/13What is a 529 plan?• A tax-advantaged way for families to save for college• Available to investors nationwide• Proceeds can be used for any accredited college
| 8EO017 281455 4/13Benefits of a 529 plan• Anyone — regardless of income — can contributeto the account• You can change beneficiaries at any time• Control of the account will not shift to the childas with traditional savings accounts• Favorable financial aid treatment
| 9EO017 281455 4/13Benefits of a 529 plan• Rollovers allowed once every 12 months or uponchange of a beneficiary• Investment changes allowed once per calendar year• You have other options if the child does notattend college
| 10EO017 281455 4/13The tax-smart way to save• You pay no federal income taxes– On your earnings while the account is invested– When you withdraw money to pay for college expenses• Contributions are made with after-tax dollarsWithdrawals 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 theAmerican Opportunity Credit Scholarship or Lifetime Learning Credit is claimed for same expenses. If withdrawingfunds for qualified higher education expenses from both a 529 account and a Coverdell Education SavingsAccount, a portion of the earnings distribution may be subject to tax and penalty on amounts that exceed qualifiedhigher education expenses. Read the offering statement for details.
| 11EO017 281455 4/13The tax-smart way to save• Gift tax benefits: Make five years’ worth of giftswithout triggering the federal gift tax• Maximum for individuals: $70,000 for 2013• Maximum for married couples: $140,000
| 12EO017 281455 4/13The tax-smart way to saveA 529 account can help decrease your taxable estate while youmaintain control over assetsMarried couples filing jointly may contribute up to $140,000 per beneficiary. Individuals may contribute up to $70,000. Contributions are generallytreated as gifts to the beneficiary for federal gift tax purposes and are subject to annual federal gift tax exclusion amount ($40,000 for 2013). Contributormay elect to treat contribution in excess of that amount (up to $70,000 for 2013) as pro-rated over 5 years. Election is made by filing a federal gift taxreturn. While contributions are generally excludable from contributor’s gross estate, if electing contributor dies during 5-year period, amounts allocableto years after death are includible in contributor’s gross estate. Consult your tax advisor for more information.Ω$140,000Ω$140,000Ω$140,000Ω$140,000ΩGrandparents$700,000Ω$140,000
| 14EO017 281455 4/13A wide range of investmentchoices• Age-based portfolios• Goal-based portfolios• Individual fund options from Putnam and otherfirms• Putnam Absolute Return Funds
| 15EO017 281455 4/13Age-based portfoliosNewborn 4 8 12 18Conservative portfolioStocksBondsCashModerate portfolioAggressive portfolioActively managed and adjust over time, becoming more conservativeas the child approaches college age21%70%37%25%37%38%26%37%9%31%3%66%85%100%15%Asset allocations shown are target allocations. Actual allocations may vary.The six age-based and goal-based options invest across four broad asset categories: short-term investments, fixed-income investments, U.S. equityinvestments, and non-U.S. equity investments. Within these categories, investments are spread over a range of asset allocation portfolios thatconcentrate on different asset classes or reflect different styles.Each age-based option has a different target date, which is based on the year in which the beneficiary of an account was born. The principal value ofthe funds is not guaranteed at any time, including age-based options closest to the college age.
| 16EO017 281455 4/13Goal-based portfoliosBalancedAllocations shown are target allocations; actual allocations may vary. See the offering statement fordetails.Actively managed and keep the same allocation mix, regardlessof the child’s ageAggressive growthGrowthBalanced Option Growth Option Aggressive Growth Option• Putnam 529 GAA GrowthPortfolio• Putnam 529 Balanced Portfolio• Putnam 529 Money MarketPortfolio• Invests in the Putnam 529 GAAGrowth Portfolio and Putnam529 All Equity Portfolio• Invests in the Putnam 529 GAAAll Equity PortfolioStocksBondsCash100%85%15%34%6%60%
| 17EO017 281455 4/13Individual investment optionsStocks Bonds Cash• Putnam Equity Income FundOption• Putnam International CapitalOpportunities Fund Option• Putnam Voyager Fund Option• Fidelity Advisor Small Cap FundOption• MFS Institutional InternationalEquity 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. GovernmentSecurities Fund: 2–5 years OptionCapital 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 moneymarket 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.
| 18EO017 281455 4/13Absolute Return Funds• Putnam 529 for America is the only 529 account to offer a suite of absolutereturn funds as an investment option• The funds target positive 3-year returns of 1%, 3%, 5%,or 7% above inflation as measured by T-bills andwith lower relative volatilityAbsolute return investing canbe an ally in helping to navigatetoday’s market volatilityChart 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 duringstrong market rallies. There is no guarantee that the funds will meet their objectives.Putnam AbsoluteReturn 100Putnam AbsoluteReturn 300Putnam AbsoluteReturn 500Putnam AbsoluteReturn 700+7%+5%+3%+1%® ® ® ®
| 19EO017 281455 4/13Putnam Absolute Return FundsPutnamAbsolute Return100 Fund®optionPutnamAbsolute Return300 Fund®optionPutnamAbsolute Return500 Fund®optionPutnamAbsolute Return700 Fund®optionFor investors consideringshort-term securities.Invests in bonds and cashinstruments.For investors consideringa bond fund. Invests inbonds and cashinstruments.For investors consideringa balanced fund. Caninvest in bonds, stocks, oralternative asset classes.For investors consideringa stock fund. Can invest inbonds, stocks, oralternative asset classes.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.Consider these risks before investing: Our allocation of assets among permitted asset categories may hurt performance. The prices of stocks and bonds in the fund’s portfolio may fallor 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 tradingstrategy 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 increasinginvestment exposure. Bond investments are subject to interest-rate risk, which means the prices of the fund’s bond investments are likely to fall if interest rates rise. Bond investments alsoare subject to credit risk, which is the risk that the issuer of the bond may default on payment of interest or principal. Interest-rate risk is generally greater for longer-term bonds, and credit riskis generally greater for below-investment-grade bonds, which may be considered speculative. Unlike bonds, funds that invest in bonds have ongoing fees and expenses. Lower-rated bondsmay 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. Internationalinvesting involves certain risks, such as currency fluctuations, economic instability, and political developments. Additional risks may be associated with emerging-market securities, includingilliquidity and volatility. The use of derivatives involves additional risks, such as the potential inability to terminate or sell derivatives positions and the potential failure of the other party to theinstrument to meet its obligations. The fund may not achieve its goal, and it is not intended to be a complete investment program. The fund’s effort to produce lower volatility returns may notbe successful and may make it more difficult at times for the fund to achieve its targeted return. In addition, under certain market conditions, the fund may accept greater volatility than wouldtypically be the case, in order to seek its targeted return. For the 500 Fund and 700 Fund these risks also apply: REITs involve the risks of real estate investing, including decliningproperty values. Commodities involve the risks of changes in market, political, regulatory, and natural conditions. Investments in small and/or midsize companies increase the risk of greaterprice fluctuations. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. Additional risks are listed in the funds’ prospectus.
| 21EO017 281455 4/13$500 monthly contributions at ahypothetical 6% annual growth rate5 years 10 years 18 years$163,477Hypotheticaltaxableaccount value$193,677Hypothetical529account value$81,940$75,007$34,885$33,446Your savingsaccumulate fasterbecause accountis not taxedThis example assumes contributions of $500 per month, a hypothetical 6% nominal rate of return compounded monthly with an effective return of6.17%, and a 28% tax bracket for the taxable account. Performance shown is for illustrative purposes and is not related to an actual investment. Regularinvesting 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 theinvestment return for the taxable investment more favorable than reflected on the chart. Investors should consider their personal investment horizon andincome tax brackets, both current and anticipated, when making an investment decision. These may further impact the results of the comparison.
| 22EO017 281455 4/13The Smith familywaits 10 yearsto start saving,contributing$1,219 every monthTotal contribution$117,024The Jones familystarts saving today,contributing$340 every monthTotal contribution$73,440Start early, contribute oftenThis 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 ahypothetical 8% annual return compounded monthly.Earnings$89,714Account value$163,154after 18 yearsEarnings$46,130Account value$163,154after 8 years
| 23EO017 281455 4/13The Jonesgrandfathermakes an initialcontribution of$14,000Totalcontribution$62,816The Jones parentscontribute $226 everymonthLet the whole family contributeThis 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$104,492Account value$167,308after 18 years
| 25EO017 281455 4/13A gift of $70,000 in 2013 would constitute five years’ worth of gifts. Additional gifts made for the same beneficiary in the same five-year period would besubject 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 allocableto year after death are inducible in the contributor’s gross estate.* Contribution limit as of 1/1/13. Subject to periodic review.How much can you contribute?• No minimum investment• Contributions can occur until the account valuereaches $370,000*• Contribute five years’ worth of gifts in a single year
| 26EO017 281455 4/13Many ways to contribute• Invest a lump sum• Establish a dollar cost averaging program• Establish a systematic investment programfrom your bank• Encourage contributions with gift certificatesSystematic investing and dollar cost averaging do not assure a profit or protect against loss in adeclining market. You should consider your ability to continue investing during periods of low prices.
| 27EO017 281455 4/13Withdrawals are easy• You tell us how tomake out the check• Mail the completed formto Putnam InvestmentsWithdrawals of earnings not used to pay for qualified higher educationexpenses are subject to tax and a 10% penalty. State taxes may apply.