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TEXAS TOMORROW FUNDS. College Savings Made Easy may be the single most rewarding investment you can ever make. Education.

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Presentation on theme: "TEXAS TOMORROW FUNDS. College Savings Made Easy may be the single most rewarding investment you can ever make. Education."— Presentation transcript:

1 TEXAS TOMORROW FUNDS

2 College Savings Made Easy may be the single most rewarding investment you can ever make. Education

3 The More They Learn, the More They Earn Average Earnings by Level of Education* *Ages 25-64, year-round full-time workers, mean earnings. Source: U.S. Census, March 2002 Current Population Survey.

4 The Rising Cost of College Private Public Source: The College Board, Enterprise Capital Management, Inc. Costs are estimated assuming a 6 percent yearly increase. Costs include tuition, fees, room, board, transportation and other expenses for students that live on campus. Total Estimated Annual U.S. University Costs, Public Versus Private

5 Before 1956: No help from the government. 1956: Introduction of UGMA. 1966: UGMA revised. 1986: UTMA introduced. 1996: 529 plans created. 1997: Taxpayer Relief Act of 1997 created Education IRA. 2001: EGTRRA * revamps tax law, college savings plans improved. Education IRA renamed Coverdell Savings Account. The Evolution of Paying for College *Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).

6 What is a 529 Plan? Federal tax benefits:  Tax-free growth of your investment.  Tax-free withdrawal of earnings for qualified education expenses. * (Qualified education expenses may be free from state income tax depending on state and residency.)  Favorable federal estate and gift tax provisions. Other key benefits:  Control — Retain permanent control over plan assets.  Affordability — Low minimum investment.  Flexibility — Ability to change beneficiary. * Non-qualified withdrawals are subject to income tax on earnings, plus a 10 percent federal tax penalty.

7 A Smart Solution Where can I use a 529 savings plan?  Most public or private universities  Graduate schools, community colleges or vocational schools  Texas and beyond How can my 529 savings plan assets be used?  Tuition  Required fees  Certain room and board, books and supplies  Required supplies and equipment

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9 Leverage Your College Savings  Allows tax-free growth of your investments and tax-free withdrawals on earnings used for qualified education expenses. * (Qualified education expenses may be free from state income tax depending on state and residency.)  Provides opportunity for estate and gifting benefits.  Professional management by multiple world-class investment managers.  Offers a choice of 19 investment portfolios. * Non-qualified withdrawals are subject to income tax on earnings, plus a 10 percent federal tax penalty.

10 The Advantage of Tax-Free Growth Over Time Don’t let taxes take a bite out of your college savings. Growth of a $2,000 Annual Investment Chart is for illustration purposes only and does not represent the past or future performance of any investment or investments. The actual investment performance of an investment in Tomorrow’s College Investment Plan may differ from that shown in the chart. Assumes a $2,000 annual investment at the beginning of each year at an 8 percent annual return in the 28 percent tax bracket. Until 2010, earnings withdrawn for qualified education expenses are free from federal income tax and may be free from state income tax depending on state and residency. Non-qualified withdrawals are subject to income tax, plus a 10 percent federal tax penalty.

11 Fast Facts on Enrollment and Contributions  Enrollment period is year-round.  No age limits.  Account owner and beneficiary must be U.S. citizens.  High contribution limit – up to $257,460. * *Texas residents and beneficiaries may see the Plan Description for details on how all contributions toward a beneficiary, including contracts purchased through the Texas Guaranteed Tuition Plan and all Tomorrow’s College Investment Plan accounts in the beneficiary’s name, are considered together as the total contributions for the beneficiary, not to exceed $257,460.

12 Balanced 100% Stock Strategies for Your College Saving Needs Several Single-Fund Portfolios 12 portfolios focus on a single investment strategy or asset class. Stocks Bonds Money Market Newborn College-Ready Five Age-Based Portfolios Allocation shifts with time horizon Fixed Allocation Two Static Allocation Portfolios 60% Stocks 40% Bonds

13 Access to World-Class Money Management

14 Marsico Capital Management LLC Pacific Investment Management Co. LLC, BlackRock Advisors Inc. Barrow, Hanley, Mewhinney & Strauss TCW Investment Management Co. Rockefeller & Co. Inc. TCW Investment Management Co. Montag & Caldwell Inc. UBS Global Asset Management (Americas) Inc. SSgA Funds Management Inc. Eagle Asset Management Inc. Gabelli Asset Management Co. Transamerica Life Insurance Company, a member of the AEGON Insurance Group Building Blocks for Growth Underlying Funds of Tomorrow’s College Investment Plan. For more complete information about the investment options and underlying funds, including fees, expenses and risks, please see the Plan Description. Portfolio Manager Capital Appreciation 529 Portfolio Core Bond 529 Portfolio Deep Value 529 Portfolio Equity 529 Portfolio Global Socially Responsive 529 Portfolio Government Securities 529 Portfolio Growth 529 Portfolio Growth and Income 529 Portfolio S&P 500 Index 529 Portfolio Small Company Growth 529 Portfolio Small Company Value 529 Portfolio Stable Value 529 Portfolio

15  Multiple investment options for tax-free growth.  Covers tuition and fees, room and board, even computers.  No guarantee, greater return potential and risk.  For U.S. citizens. Tomorrow’s College Investment Plan Overview

16 The Earlier You Start, The Less You May Need to Invest Rate of return is for illustrative purposes only and does not represent the performance of any investment or plan. Cost of Borrowing = $88,488 Save Now $44,712 Pay Later $133,200 College Years College Savings Goal: $100,000 Save NowPay Later Save monthly for 18 years at 8% = $100,000 Take out a loan repayable over 10 years at 6% = $100,000 Monthly Contribution = $207 Total Contributions = $44,712 Monthly Payment = $1,110 Total Cost = $133,200

17 Jumpstart Your Savings Today Chart assumes a $2,000 initial investment followed by regular monthly contributions at a hypothetical return of 6 percent for 18 years. Rate of return is for illustrative purposes only and does not represent the performance of any investment or plan. A systematic investment plan does not ensure a profit nor protect against a loss in declining markets. $36,415 $20,027 $11,833 $200 a month $100 a month $50 a month

18 Dream for the Future Imagine what the future can hold for your children given an education.

19 Each 529 portfolio is subject to underlying fund expenses and a plan manager administrative fee. For more information, please read the Plan Description carefully. No money that is invested in Tomorrow’s College Investment Plan is insured by the State of Texas and neither the principal that is invested nor the investment return is guaranteed by the State of Texas or any other entity. Investments in the Plan are not FDIC insured, not bank guaranteed and may lose value. If you or your beneficiary reside outside of Texas, please consider, before investing, whether that state's qualified tuition program offers state tax or other benefits. Investors should consider the investment objectives, risks, charges and expenses associated with Tomorrow's College Investment Plan before investing. For a plan description containing this and other information, please call the plan's underwriter, Enterprise Fund Distributors, at and read it carefully prior to investing or sending money.

20 TEXAS TOMORROW FUNDS GRAD (4723) P529 CA1.06 Distributing Broker/Dealer: Enterprise Fund Distributors, Inc., Member NASD/SIPC, Atlanta Financial Center, 3343 Peachtree Road, N.E., Suite 450, Atlanta, Georgia Issued byManaged by


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