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The Fidelity Advisor 529 Plan
Start investing today. Be ready for college tomorrow. CE SLIDE OBJECTIVE Begin the presentation. NOTE TO PRESENTER You can use the following points to introduce the presentation: The presentation will focus on an important college savings vehicle – the 529 plan, and the Fidelity Advisor 529 Plan in particular. 529 plans are named for Section 529 of the Internal Revenue Code, and are a tax-advantaged way to help people save money specifically for college. 529 plans are easy to understand – as they function a lot like other tax-advantaged savings vehicles that the audience may already be familiar with. 529 plans have many features and benefits that will be reviewed in the presentation. Not FDIC Insured May Lose Value No Bank Guarantee
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Learning Objectives Upon completion of this seminar you will be able to: 1 Communicate to clients the importance of college savings in light of escalating costs Communicate to clients the importance of college savings in light of escalating costs Explain how a 529 works and its potential tax advantages Review the features of different college savings options 2 Explain how a 529 works and its potential tax advantages 3 Review the features of different college savings options OPTIONAL SLIDE FOR CE CREDIT SLIDE OBJECTIVE Review learning objectives in instances where this presentation is being used for advisor continuing education instead of a shareholder presentation. This seminar is defined as basic level for your continuing education credit.
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Invest in a Child’s Future The Fidelity Advisor 529 Plan can help make a college education happen
College is the second-most important saving goal for parents, ahead of both retirement and general savings.1 Tax Advantages Control and Flexibility Accelerated Gifting When you invest your money for college in a 529 plan, your earnings grow tax deferred and withdrawals are free from federal income taxes.2 Unlike other savings accounts, a 529 offers the owner complete control of the account, even after the beneficiary turns 18. Accelerated gifts may increase a 529 plan account balance over time, thanks to compounding. SLIDE OBJECTIVE Point out that the Fidelity Advisor 529 can play a valuable role as part of a disciplined college savings strategy. NOTE TO THE PRESENTER Provide a basic definition of a 529 for the audience and review the benefits of investing in one: A 529 plan is a tax-advantaged investment vehicle designed to encourage saving for the higher education expenses of a beneficiary. Tax advantages: When you invest your money for college in a 529 plan, your earnings grow tax deferred and withdrawals are free from federal income taxes when used for qualified higher education expenses such as tuition and room and board. Control and flexibility: Unlike other savings accounts, a 529 offers the owner complete control of the account, even after the beneficiary turns 18. The owner also has the flexibility to use the assets at most accredited colleges and universities, and there are no income requirements for opening an account. Accelerated gifting: A 529 plan can get the entire family involved in contributing towards the college savings of a loved one. A parent, relative, or friend can contribute up to five years’ worth of gifts to a 529 and avoid the gift tax. We'll get more into the specifics of gifting later. 1 “How America Saves for College,” Sallie Mae, 2016. 2 When used for qualified higher education expenses such as tuition and room and board.
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The Growing Cost of a College Education
WHAT TUITION AND FEES ALONE COULD COST Cost of College Today Cost of College in 2033 Newborn Age 18 $180,377 College costs are increasing an average of 5% per year $134,600 $52,800 $39,400 SLIDE OBJECTIVE To emphasize the importance of, and need for, a disciplined college saving strategy by pointing out the soaring cost of college. NOTE TO THE PRESENTER You can point out that the cost of college is so high that for many families, paying for college poses a real threat to retirement saving and other financial plans. Before you prepare your children for college, you need to prepare yourself financially. Public Institution Private Institution Public Institution Private Institution Source: savingforcollege.com. Based on average tuition and fees for 2014–2015 as reported by the College Board and assumed to increase 5% annually. These figures do not include other costs a beneficiary will incur as a college student, including room, board, books, supplies, equipment, and transportation.
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Make the Most of Every Dollar Tax-deferred investing may translate into more money for college
Tax-deferred (529) account Taxable account $0 Years Over 18 years, an advantage of more than $31,000 OPTIONAL SLIDE SLIDE OBJECTIVE Demonstrate how the tax-deferred growth allowed in a 529 helps the investor to make the most of every dollar that he/she invests. NOTE TO THE PRESENTER Point out that taxes can inhibit the potential growth of savings, and when investors are saving for a time-sensitive goal like college, that really matters. Please review all information, including all assumptions of the hypothetical example. HYPOTHETICAL EXAMPLE This hypothetical example compares the after-tax amounts potentially available at the end of the 18 years after investing in a tax-deferred (529 plan) account versus a taxable account. Assumptions include an initial after-tax investment of $10,000 and a $350 monthly after-tax investment at a 7% annual rate of return compounded monthly for 18 years for the tax-deferred (529 plan) account. The taxable account assumes an imputed constant annual federal income tax rate of 25% on earnings. Local and state taxes, inflation, fees, and/or expenses are not taken into account. If they had been deducted, performance would have been lower. The ending value of the tax-deferred (529 plan) account assumes all distributions will be used for qualified higher education expenses and, therefore, are federal income tax free. Investors may realize capital gains or capital losses in any year that they sell fund shares within a taxable account, although this example does not take into account capital loss carried forward or other tax strategies used to reduce taxes that could be incurred in a taxable account. Lower capital gains or dividend tax rates or tax rates in general would make the return for the taxable account more favorable. The earnings on distributions from a 529 plan not used for qualified higher education expenses are subject to federal income taxes and a 10% penalty. See last slide for important information on all hypothetical examples.
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Capture the Greatest Growth Potential Consider the financial advantage of investing as early as possible HYPOTHETICAL EXAMPLE Age of Child When Investing Begins Years until College Potential Accumulation by College Age Newborn 18 $148,154 1 year old 17 $124,389 3 years old 15 $109,502 5 years old 13 $87,765 Invest $350 a month for 18 years in a tax-deferred account assuming a 7% annual rate of return. OPTIONAL SLIDE SLIDE OBJECTIVE Demonstrate how regular contributions, in addition to compounded interest, can help investors increase their savings by the time beneficiaries reach college age. NOTE TO THE PRESENTER Point out that the earlier investors start saving, the more they can potentially earn, decreasing the need for other forms of aid in the future (i.e. Federal student loans, private loans). The chart is not intended to predict or project the performance of any investment. Past performance is no guarantee of future results. Assumptions include regular monthly investments of $350 into a tax-deferred account (529 plan) at a 7% annual rate of return compounded monthly over a series of different time periods (18, 17, 15, and 13 years). The regular monthly contributions are assumed to be made at the beginning of each month. Local and state taxes, inflation, fees, and/or expenses are not taken into account. If they had been deducted, performance would have been lower. The ending value of the tax-deferred (529 plan) account assumes all distributions will be used for qualified higher education expenses and, therefore, are federal income tax free. Any earnings on nonqualified distributions from 529 plan accounts are subject to federal income taxes at the distributee’s rate as well as a 10% federal penalty tax. Periodic investment plans do not guarantee a profit or protect against a loss in a declining market. See last slide for important information on all hypothetical examples.
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Invest Regularly Regular contributions over time can really add up*
HYPOTHETICAL EXAMPLE $231,399 It’s simply a matter of setting an investing schedule and sticking to it. Total saved for college $350 Contribute $350 every month for 18 years $400 Contribute $400 each December as a gift $1,000 Add $1,000 for your child’s birthday each year $10,000 Begin with a $10,000 initial investment OPTIONAL SLIDE SLIDE OBJECTIVE Demonstrate the significance of consistently contributing to a college savings plan after the initial investment has been made, and show how simple it can be. Please review all information, including all assumptions of the chart. The hypothetical illustrates the aggregate growth (total ending balance) of four monetary scenarios in a tax-deferred (529 plan) account over 18 years, assuming a 7% annual rate of return. All investments are made at the beginning of each month. Contributions to a 529 plan account must be made with after-tax dollars. The total investor contribution is $110,800. Total gifts to an individual that exceed the annual federal exclusionary amount may be subject to federal gift taxes. The ending value of the tax-deferred 529 plan account assumes all distributions will be used for qualified higher education expenses and, therefore, are federal income tax free. Any earnings on nonqualified distributions from 529 plan accounts are taxable at the distributee’s income tax rate and are subject to a 10% federal penalty tax. Past performance is no guarantee of future results. Your performance will vary, and you may have a gain or loss when you sell your units. Periodic investment plans do not ensure a profit or protect against a loss in a declining market. * Local and state taxes, inflation, fees, and expenses were not taken into account. If they had been deducted, performance would have been lower. These hypotheticals are not intended to predict or project the investment performance of any security.
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Give a Gift That Gives Back Accelerated gifts: Good for the receiver and the giver
Accelerated gifts may increase a 529 plan account balance over time, thanks to compounding. Assets gifted to a 529 plan are considered immediately removed from the donor’s estate, which may help reduce or eliminate estate taxes. Single Filer $70,000 Married Filer $140,000 Gifting-limit numbers per beneficiary: OPTIONAL SLIDE SLIDE OBJECTIVE Expand on the idea of giving a gift to a 529, as mentioned on the previous slide, and review the double benefit of making an accelerated gift to a 529 for clients who can afford it. In order for an accelerated transfer to a 529 plan (for a given beneficiary) of $70,000 (or $140,000 combined for spouses who gift split) to result in no federal transfer tax and no use of any portion of the applicable federal transfer tax exemption and/or credit amounts, no further annual exclusion gifts and/or generation-skipping transfers to the same beneficiary may be made over the same five-year period, and the transfer must be reported as a series of five equal annual transfers on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. If the donor dies within the five-year period, a portion of the transferred amount will be included in the donor’s estate for estate tax purposes.
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Exempt from the Federal Gift Tax
Accelerated gifts: Contribute up to five years’ worth of gifts in one year with no gift tax1 Grandparents $140,000 Grandchild 1 $140,000 Grandchild 2 $140,000 Grandchild 3 This chart demonstrates how grandparents immediately reduced their estate by over $420,000 with a maximum five-year gift to three different grandchildren. OPTIONAL SLIDE SLIDE OBJECTIVE Expand on the idea of giving a gift to a 529 mentioned on the previous slide by providing additional details about the benefits of accelerated gifting to a 529 for clients who can afford it. NOTE TO THE PRESENTER Provide details about the graphic on the slide with the following information: Accelerated gifting to a 529 allows an individual to make up to five years’ worth of gifts to a 529 plan beneficiary in one year without triggering the federal gift tax. For example, instead of the annual $14,000 exemption from the gift tax ($28,000 for married couples, filing jointly), a grandparent can contribute five times that amount ($70,000 if single/$140,000 if married, filing jointly) in one year to a beneficiary. Although no further gifts to the same beneficiary may be made over the next five-year period, and the gift must be reported as a series of five equal annual gifts on federal gift tax returns, the grandparent can give an accelerated gift to any number of 529 account beneficiaries. In the example on the slide, the grandparent was able to bypass the annual $14,000 gift limit without triggering the federal gift tax, AND immediately reduce his/her estate by $420,000. 1 No further gifts to the same beneficiary may be made over the next five-year period. The gift must be reported as a series of five equal annual gifts on federal gift tax returns. See the Offering Statement for more information.
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The College Savings Gap Continues to Grow Parents intend to cover more but are on track to cover less1 The Amount Intended to Cover Continues to Increase The Amount on Track to Cover Continues to Decrease In 2013, parents intended to cover 62% of college costs They actually are on track to cover only 29% of that savings goal SLIDE OBJECTIVE Parents have indicated that they intend to cover more of college costs but they are actually on track to cover less. 1 About the Fidelity Investments 2016 College Savings Indicator Study: As part of the study, Fidelity conducted a survey of parents with college-bound children of all ages. Parents provided data on their current and projected household asset levels, including college savings, use of an investment advisor, and general expectations and attitudes toward financing their children's college education. Using Fidelity's proprietary asset-liability modeling engine, the company was able to calculate future college savings levels per household against anticipated college costs. The results provided insight into the financial challenges parents face in saving for college. Data for the Indicator (number of children in household, time to matriculation, school type, current savings, and expected future contributions) was collected by Boston Research Technologies, an independent research firm, through an online survey from May 13 to June 12, 2016, of 2,196 parents nationwide with children aged 18 and younger who are expected to attend college. The survey respondents had household incomes of $30,000 a year or more, and were the financial decision-makers in their household. College costs were sourced from the College Board's Trends in College Pricing Future assets per household were computed by Strategic Advisers, Inc. (a registered investment adviser and wholly owned subsidiary of FMR LLC). Within Fidelity's asset-liability model, Monte Carlo simulations were used to estimate future assets at a 75 percent confidence level. The results of the Fidelity College Savings Indicator may not be representative of all parents and students meeting the same criteria as those surveyed for this study.
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Today’s federal financial aid formula considers roughly:
Minimal Impact on Financial Aid A 529 plan affects financial aid less than many people realize Earnings from a 529 used to pay for college expenses are not considered part of parental or child income. Today’s federal financial aid formula considers roughly: 5% of parents’ assets (for example, a 529 plan) 20% of child’s assets in a tax‐deferred account (for example, an UGMA/UTMA) Earnings from a 529 used to pay for college expenses are not considered part of parental or child income. Today’s federal financial aid formula considers roughly: 5% of parents’ assets (for example, a 529 plan) 20% of child’s assets in a tax‐deferred account (for example, an UGMA/UTMA) SLIDE OBJECTIVE Dispel the myth that saving too much in a 529 can hurt financial aid possibilities. NOTE TO THE PRESENTER Point out that: A 529 plan affects financial aid less than many people realize. Today’s federal financial aid formula considers roughly: 5% of parents’ assets (for example, a 529 plan; if grandparents own the plan, none of the 529 assets are considered). 20% of a child’s assets in a tax-deferred account (for example, an UGMA/ UTMA). Source: The College Board, 2012. The College Board, 2012.
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Savings Plan Options 529 plans compare favorably 529 Plans
Coverdell ESAs UGMA/ UTMAs Roth IRA Participant controls assets Qualified distributions are federal income tax free Unlimited tax-deferred investment earnings Use for noneducation expenses without penalty No income restrictions Gifts up to $70,000 in a single year per beneficiary* OPTIONAL SLIDE SLIDE OBJECTIVE Show how a 529 plan measures up to other college savings options. NOTE TO THE PRESENTER Highlight some details surrounding the benefits of a 529 over other college savings options: The account owner controls the assets, even after the beneficiary turns 18. Money is invested after taxes, and your earnings grow tax deferred. Distributions are federal income tax free when used for qualified higher education expenses like tuition, room, and board. There are gift tax and estate tax planning benefits associated with 529 plans. There are no income restrictions associated with 529s. 529s offer high contribution limits, both on an annual and lifetime basis, per beneficiary (the Fidelity Advisor 529 Plan offers a $375,000 maximum contribution per beneficiary effective 1/1/14). U.S. residents can participate in most 529 plans (they must be 18 or over at the time the account is opened). * In order for an accelerated transfer to a 529 plan (for a given beneficiary) of $70,000 (or $140,000 combined for spouses who gift split) to result in no federal transfer tax and no use of any portion of the applicable federal transfer tax exemption and/or credit amounts, no further annual exclusion gifts and/or generation-skipping transfers to the same beneficiary may be made over the five-year period, and the transfer must be reported as a series of five equal annual transfers on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. If the donor dies within the five-year period, a portion of the transferred amount will be included in the donor's estate for estate tax purposes.
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In-State vs. Out-of-State 529 Plans
Calculating the actual benefit HYPOTHETICAL EXAMPLE* You invest $10,000 in an in-state 529 plan Your state allows you to deduct $2,000 The state tax rate is 5% You are in the 33% federal tax bracket 1 Multiply state’s maximum allowed deduction by state tax rate. 2 State tax rebates are taxed at federal tax levels. Multiply the bracketed figure by (1 – federal rate). $2,000 deduction x 5% tax rate = x $67 benefit [$100] (1–33%) OPTIONAL SLIDE SLIDE OBJECTIVE Show the audience how to objectively weigh the benefits of investing in a 529 plan sponsored by the state they live in vs. investing in a 529 sponsored by a different state. NOTE TO PRESENTER Point out other important factors an investor should consider when choosing a 529 plan to invest in: Reputation Investing expertise and innovation Choice and flexibility of investment options The ability to invest systematically over time Remind the audience that any state rebates are taxed at the federal income tax level, which reduces the value of the state tax benefit. Note the example on the slide: a $67 state tax benefit over 18 years isn’t much and can be easily outpaced by a plan that has slightly better annual returns or lower expenses. Visit institutional.fidelity.com/529 for a link to the State Tax Deduction Calculator. * Not based on any specific state’s 529 tax deduction or state income tax rates.
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Choose the Investment Tradition of Fidelity The Fidelity Advisor 529 Plan offers a fluid, age-based approach to help meet changing allocation needs Asset Class Age College 18+ 3 6 9 12 15 18 U.S. Equity Funds 67% 58% 49% 41% 32% 23% 14% Non-U.S. Equity Funds* 29% 25% 21% 17% 10% 6% Bond Funds 5% 30% 36% 42% 50% Short-Term Funds 0% 12% 18% MORE AGGRESSIVE LESS AGGRESSIVE Portfolio allocations shift gradually each year. SLIDE OBJECTIVE Show how the Fidelity Advisor 529’s age-based approach to investing can help: Increase returns early in the investing process. Preserve potential earnings as college and the withdrawal of assets for tuition bills get closer. NOTE TO THE PRESENTER Point out that: Fidelity is a leading provider of 529 plans. Our investment process is grounded in a long tradition of investment expertise and innovation. The Fidelity Advisor 529 is backed by a company with a solid reputation for helping investors meet their needs. You can also provide the following details on how the age-based approach works: The investor chooses an age-based portfolio based on the projected year in which the beneficiary will enter college (other factors, such as personal risk tolerance, also matter, and the investor can start with any portfolio he/she wants). As time passes, that portfolio is rebalanced gradually to more conservative asset mixes. When the portfolio’s target date (college) arrives, the portfolio mirrors the exact allocation as the plan’s final, most conservative portfolio, the College Portfolio. Principal invested is not guaranteed at any time, including at or after the target date. Active Asset Allocation Fidelity managers have the flexibility to adjust major asset classes by +/- 10%1 Active allocation can help improve returns and potentially mitigate risk * Includes developed and emerging-market funds. This table illustrates the approximate target asset allocation for the Fidelity Advisor 529 Plan Age-Based Portfolios and how these allocations may change over time. Due to rounding and/or cash balances, asset allocations may not equal 100%. Asset allocation percentages are based on long-term strategic weights and may not align with actual current weights. 1 In the early savings/accumulation years, we would not expect the active asset allocation range for equities to exceed 95%. This table is not intended to represent current or future allocations in any portfolio.
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2 Static Allocation Portfolios 17 Individual Fund Portfolios
Fitting a 529 Plan into Your Overall Financial Plan Your advisor can help 8 Age-Based Portfolios 2 Static Allocation Portfolios Gradual, automatic reallocation of portfolio assets Fidelity Advisor 529 Aggressive Growth Portfolio Fidelity Advisor 529 Moderate Growth Portfolio 17 Individual Fund Portfolios Domestic Equity Portfolios Fidelity Advisor 529 Dividend Growth Portfolio Fidelity Advisor 529 Equity Growth Portfolio Fidelity Advisor 529 Equity Income Portfolio Fidelity Advisor 529 Growth Opportunities Portfolio Fidelity Advisor 529 New Insights Portfolio Fidelity Advisor 529 Small Cap Portfolio Fidelity Advisor 529 Stock Selector Mid Cap Portfolio Fidelity Advisor 529 Value Strategies Portfolio International Equity Portfolio Fidelity Advisor 529 Diversified International Portfolio Fixed Income Portfolios Fidelity Advisor 529 High Income Portfolio† Fidelity Advisor 529 Inflation-Protected Bond Portfolio Fidelity Advisor 529 Limited Term Bond Portfolio* Fidelity Advisor 529 Strategic Income Portfolio Fidelity Advisor 529 Total Bond Portfolio Asset Allocation Fidelity Advisor 529 Global Strategies Portfolio Fidelity Advisor 529 Strategic Dividend & Income Portfolio Money Market Portfolio Fidelity Advisor 529 Money Market Portfolio‡ Your financial advisor can help you choose from among our 27 portfolios to build a personalized 529 plan portfolio that meets your needs, risk tolerance, and overall investing goals. You can choose from eight age-based portfolios that gradually become more conservative as your child approaches college age. You also have the option of two static allocation portfolios: Aggressive Growth and Moderate Growth. And you have 17 portfolios based on individual funds from five major asset classes: domestic equity, international equity, fixed income, asset allocation, and money market. That allows you to diversify, a key long-term investment strategy. But diversification does not ensure a profit or guarantee against a loss. You may combine any number of portfolios to create a plan that suits your needs. Building the right 529 plan is as important for your financial goals as it is for your peace of mind. The FA 529 High Income Portfolio impose a 1% short-term redemption fee on units held less than 90 days. See Offering Statement for more details. * Prior to 10/30/13 the portfolio was named FA 529 Intermediate Bond Portfolio. ‡ An investment in the Fidelity Advisor 529 Money Market Portfolio is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. It is possible to lose money by investing in the Portfolio.
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Invest in a Lifetime Your advisor can help you build your plan
1 2 3 Get ready for college Open an account Let it grow People with a bachelor’s degree earn 84% more over a lifetime than high school graduates* OPTIONAL SLIDE SLIDE OBJECTIVE Close the presentation with a high-level summary of how a Fidelity Advisor 529 Plan works and its benefits, to reinforce the value our plan provides. NOTE TO THE PRESENTER Reinforce the most important reasons for investing in a Fidelity Advisor 529 by pointing out that: When an audience member or other investor contributes to a 529 to help plan for college expenses, he or she is investing in the future of a child he or she cares about. These days, the advantage of a college education can be significant. * Georgetown's Center on Education and the Workforce, August 2011.
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Fidelity Advisor 529 Workplace Program
A great addition to your benefits package Low cost Easy to implement May help improve employee retention Differentiates you to prospective employees Convenient contribution options: Checking account withdrawal Payroll direct deposit* OPTIONAL SLIDE SLIDE OBJECTIVE If appropriate for the audience, review the advantages of adding a Fidelity Advisor 529 workplace program to a company benefits package. NOTE TO THE PRESENTER Point out that: Implementing a college savings program can increase the value of a company’s benefits package at minimal cost. Employees will likely recognize and appreciate their company’s responsiveness to their needs. Timely and useful benefits are a major factor in good employee morale and the company’s overall retention rates. Highlight the different contribution options that are most convenient for employees: Checking account withdrawal – money is automatically deducted from the employee’s bank account. Payroll direct deposit – money is automatically deducted from the employee’s paycheck. (In order to use Automated Clearing House – ACH – the payroll provider must confirm they can accommodate the file per Fidelity’s specifications.) * Ask your payroll provider if he or she can process an Automated Clearing House (ACH) file in the required format.
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Fidelity Makes Participation Easy
Simple for you, simple for your employees Complete application to open account Select deduction amounts and investments* Designate beneficiaries Choose contribution method Participant will receive quarterly statements from Fidelity summarizing all account activity OPTIONAL SLIDE SLIDE OBJECTIVE If appropriate for the audience, show how easy it is for employees to participate in a Fidelity Advisor 529 workplace plan. NOTE TO THE PRESENTER You can expand on the steps noted on the slide in greater detail as follows: The application includes information about amounts of regular contributions, investment selections, and beneficiaries. Employees choose checking account withdrawal, payroll deduction, or another contribution method. After-tax dollars are contributed and any earnings on investments are tax deferred for as long as they remain invested in the 529 plan account. Emphasize how easy participating can be – i.e., “It’s that simple.” Add that it’s also easy for employees to stay up to speed on their Fidelity Advisor 529 Plan account, thanks to quarterly statements summarizing account activity. * Federal tax law does not allow participants to have direct or indirect control over the investments in a 529 plan account.
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Your Advisor Makes It Even Easier
Your advisor is at your side throughout the process Assists in plan implementation Helps you choose appropriate funding options Provides materials to encourage participation Conducts enrollment meetings Helps employees select investments OPTIONAL SLIDE SLIDE OBJECTIVE If appropriate for the audience, show how the assistance of an advisor can make offering a Fidelity Advisor 529 workplace plan easy (i.e., a “no-brainer”). NOTE TO THE PRESENTER You can expand on the information on the slide as follows – an advisor can: Coordinate the Fidelity Advisor 529 Plan setup and implementation. Explain the features and benefits of the Fidelity Advisor 529 Plan to employees. Help employees select investment options suited to their individual needs. Answer questions from employees as their accounts mature. Keep employees up to date on any legislative changes or plan enhancements. Communicates plan enhancements
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Not FDIC Insured May Lose Value No Bank Guarantee
The Fidelity Advisor 529 Plan is offered by the state of New Hampshire and managed by Fidelity Investments. If you or the designated beneficiary are not a New Hampshire resident, you may want to consider, before investing, whether your state or the designated beneficiary’s home state offers its residents a plan with alternate state tax advantages or other benefits. Units of the portfolios are municipal securities and may be subject to market volatility and fluctuation. Not NCUA or NCUSIF insured. May lose value. No credit union guarantee. Fidelity Investments & Pyramid Design is a registered service mark of FMR LLC. Unless specifically indicated in an investment option’s detailed description, principal invested is not guaranteed at any time, including at or after the target date. Consider your current and anticipated investment horizon and income tax bracket when making an investment decision, as the illustrations presented may not reflect these factors. Systematic investing does not ensure a profit and does not limit loss in a declining market. All hypothetical examples are for illustrative purposes only and do not represent the performance of any security. The assumed rate of return used in these examples is not guaranteed, and you may have a gain or loss when you sell your units. Investments that have potential for a 7% annual rate of return also come with risk of loss. The tax and estate planning information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Fidelity does not provide legal or tax advice. Fidelity cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. Fidelity makes no warranties with regard to such information or results obtained by its use. Fidelity disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation. Before investing, consider the plan’s investment objectives, risks, charges, and expenses. Contact Fidelity or visit institutional.fidelity.com for a free offering statement. Read it carefully before investing. FIAM-BD FIDELITY INVESTMENTS INSTITUTIONAL SERVICES COMPANY, INC., 500 SALEM STREET, SMITHFIELD, RI
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