For information about the MFS® 529 Savings Plan, please read the Participant Agreement and Disclosure Statement, along with the prospectus for each investment fund available through the plan. You should read the prospectus carefully before investing as it contains complete information on the fund's investment objective(s), the risks associated with an investment in the fund, the fees, charges, and expenses involved. These elements, as well as other information contained in the prospectus, should be considered carefully before investing.
529 PUBLIC-PRES-REV2 205-14890
General Notes
• The MFS® 529 Savings Plan is a flexible college investing plan sponsored by the state of Oregon and is administered by MFS Investment Management®.
• Depending on your state of residence and the state of residence of the beneficiary, an investment in the MFS 529 Savings Plan may not afford you or your beneficiary state tax benefits.
• This presentation must be accompanied by the MFS529 Savings Plan brochure.
Lesson one:the simpler, the better
529 PUBLIC-PRES-REV2 405-14890
Key 529 tax advantages
• Earnings are tax deferred.• Withdrawals are free from federal tax through 2010 if used for qualified
higher education expenses. You will be subject to federal income tax on your earnings and may face a 10% federal tax penalty if you withdraw money for something other than qualified higher education expenses. Unless Congress extends the law, the federal tax treatment of 529 plans will revert to its status prior to January 1, 2002.
• Gift and estate tax benefit allows you to contribute up to $11,000 a year ($22,000 per married couple) per beneficiary without paying federal gift-tax consequences. Or you may gift up to $55,000 ($110,000 per married couple) to each beneficiary. You will not incur federal gift taxes as long as no additional gifts are made to the beneficiary for four years after the year during which you make the one-time gift.
1
529 PUBLIC-PRES-REV2 505-14890
Key 529 features
• Control over assets• Wide range of investment options• Additional fees are associated with 529 savings plans• Investments in 529s involve risk. You should consider
your financial needs, goals, and risk tolerance prior to investing.
1
Lesson two:the reward often outweighs the cost
529 PUBLIC-PRES-REV2 705-14890
The rising cost of college
Private Public
Participation does not guarantee that contributions and the investment return on contributions, if any, will be adequate to cover future tuition and other higher education expenses.Source: MFS calculations using data from College Board's Trends in College Pricing 2004 for tuition and fees and room and board. Calculations assume college costs will increase by 5% per year on average in all categories. For illustrative purposes only.
newborn
3 yrs.
6 yrs.
9 yrs.
12 yrs.
15 yrs.
17 yrs.
$ 299,690
$ 258,883
$ 223,633
$ 193,183
$ 166,878
$ 144,156
$ 130,754
$123,662
$106,824
$ 92,278
$ 79,713
$ 68,859
$ 59,483
$ 53,953
529 PUBLIC-PRES-REV2 805-14890
Reap the rewards
Not a high school grad
High school grad
Bachelor’s degree
Master’s degree
Ph.D.
Professional(business, law, medicine)
$ 18,568
$ 26,817
$ 50,758
$ 61,419
$ 84,021
$ 104,596
Education levelMean annual
earnings
Participation in the plan does not guarantee that contributions and the investment returnon contributions, if any, will be adequate to cover future tuition and other higher education expenses.Source: U.S. Census Bureau, March 2003
This example is for illustrative purposes only and is not intended to predict the returns of any investment choices. The performance of the investments will fluctuate with market conditions. If there were no earnings, the account value will not increase. Fees and expenses have not been taken into account. If they had been, the performance shown would be lower.
529 PUBLIC-PRES-REV2 1105-14890
A little goes a long way
This example is for illustrative purposes only and is not intended to predict the returns of any investment choices. The performance of the investments will fluctuate with market conditions.
Regular investing does not ensure a profit or protect against loss in declining markets. Investors should consider their ability to continue purchasing shares during periods of low price levels. Fees and expenses have not been taken into account. If they had been, the performance shown would be lower.
Annual return: 6%
Lesson four: share the wealth
529 PUBLIC-PRES-REV2 1305-14890
(turn to page 7 of the brochure)
A plan to pass it on
This presentation may not be handed out and must be accompanied by the MFS Investment Management 529 Brochure – 529-MFSP-BRO-01-04.
529 PUBLIC-PRES-REV2 1405-14890
Assumptions
• Married couple makes a gift of $110,000 to a 529 savingsplan account for their eight-year-old son, Connor.
• Connor starts public college at 18, attends for four years.• Once Conner graduates from college, Mrs. Anderson
changes the owner of the account from herself to Connorwith a simple letter of instruction.
• Connor’s daughter Lily is born when he is 28. At that time, Connor takes advantage of the gifting rule unique to 529 plans and gifts $55,000 in the year of Lily’s birth and every successive fifth year, eventually moving the entire balance of his account to an account for Lily.
• Lily attends private college for four years.• Hypothetical earnings are 6% per year for 40 years.
Hypothetical examples are for illustrative purposes only and are not intended to represent the future performance of any MFS product.
Lesson five: ask an expert
529 PUBLIC-PRES-REV2 1605-14890
Comparison shop
The investments you choose should correspond to your financial needs, goals, and risk tolerance.For assistance in determining your financial situation, please consult an investment professional.
Income tax treatment
Tax deferred. Nonqualified withdrawals subject to income taxes and 10%federal tax penalty. Withdrawals are tax free if used for qualified higher education expenses.
Earnings taxed at beneficiary’s rate
Contribution limits
Up to $250,000 per beneficiary
None $2,000 per child per year
Income limits
No limits No limits Phases out for single filers at$95,000 to $110,000; for jointfilers $190,000 to $220,000
Control of assets
Account owner Custodian until child reachesmajority, then the child
Account owner
Investment flexibility
You can change your assets among funds once each calendar year or when you change beneficiaries.
You can move your assets as
often as you want, but eachtransfer usually is a taxable event.
You can move your assets as often as you want.
MFS 529 Savings Plan UGMA/UTMA Education IRA
Tax deferred. Nonqualified withdrawals subject to income taxes and 10% federal tax penalty. Withdrawals are tax free if used for qualified higher education expenses.
529 PUBLIC-PRES-REV2 1705-14890
Comparison shop
Estate planning features
Assets are transferred out of the owner's estate. Owner retains control.
Asset are transferred out of the estate.
Assets are transferred out ofthe owner’s estate. Owner retains control.
Uses Can be used for almost anyaccredited post-secondaryschool
No restrictions Can be used for any qualified educational expense, includingelementary, secondary, and post-graduate
Ability to changebeneficiaries
Can be transferred to anothermember of the same familywithout penalty
Not permitted Can be transferred to anothermember of the same familywithout penalty
Penalties on nonqualifiedwithdrawals
Ordinary income taxes and a10% IRS penalty on earnings
None Ordinary income taxes and a 10% IRS penalty on earnings
State tax deduction$2,000 for joint filers and $1,000 for single filers – Oregon residents only
No No
The investments you choose should correspond to your financial needs, goals, and risk tolerance.For assistance in determining your financial situation, please consult an investment professional.
Fees $25 annual fee, waived for accounts valued over $25,000 and for Oregon residents
Differs, depending upon funding vehicle
Differs, depending upon funding vehicle
MFS 529 Savings Plan UGMA/UTMA Education IRA
529 PUBLIC-PRES-REV2 1805-14890
Flexibility
• High contribution limit of $250,000• Low minimum contribution of $250 • Reallocate contributions and earnings among MFS funds
once a year• MFS Automatic Exchange Plan
529 PUBLIC-PRES-REV2 1905-14890
Complete owner control
• Retain control over the assets• Change the designated beneficiary• Roll over other college savings accounts• Name contingent account owner
For more information on risk associated with these options, please see a prospectus.
529 PUBLIC-PRES-REV2 2105-14890
Age-based investment option
For more information on risk associated with these options, please see a prospectus.
529 PUBLIC-PRES-REV2 2205-14890
Built-in allocation approach
Periodic rebalancing does not protect against loss in declining markets. Before selecting an asset allocation, you should understand the risks associated with investments in stock, bond, international, and small company funds.
• Global asset management expertise across all asset classes
• Time-tested money management process for pursuing consistent results
• Full spectrum of investment products backed by MFS Original Research®
• Resources and services targeted to real-life needs
529 PUBLIC-PRES-REV2 2505-14890
Value-added resources
• MFS Heritage Planning®
– college savings options– choosing a college– financial aid
• mfs.com– Webcasts with MFS investment professionals and industry experts– links to 529 news, views, and more– Calculate for College interactive tool
• MFS educational series brochure – Jump Start• The BabyMintTM advantage
BabyMintTM is a registered trademark of BabyMint, Inc..
529 PUBLIC-PRES-REV2 2605-14890
Simple to start
• Determine which MFS investment options fit your goals and objectives
• Review the MFS® 529 Savings Plan Participant Agreement and Disclosure Statement
• Complete the MFS® 529 Savings Plan Account Application
The MFS® 529 Savings Plan is a flexible college investing plan sponsored by the state of Oregon and is administered by MFS Investment Management®. Depending on your state of residence and the state of residence of the beneficiary, an investment in the MFS 529 Savings Plan may not afford you or your beneficiary state tax benefits. There are additional fees with 529 savings plans.
The MFS®529 Savings Plan is only available in conjunction with qualified tuition programs.
