Planning
Planningfor
forCollege
Collegewith
with
529
529College
CollegeSavings
SavingsPlans
Plans
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“If a man empties his purse into
his head, no man can take it
away from him. An investment
in knowledge always pays the
best interest.”
- Benjamin Franklin
What is the Return on Higher Education?
What is the Return on Higher Education?
Note: Data are for persons age 25 and over. Earnings are for full-time wage and salary workers.
Source: Current Population Survey, U.S. Bureau of Labor Statistics, U.S. Department of Labor.
Information as of December 8th 2015
http://www.bls.gov/emp/ep_chart_001.htm
is it Going
Cost?
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and totables
Based on average tuition and fees for 2014-15 as reported by The College Board® and assumed to increase 5% annually. The
figures above do not include other costs your child will incur as a college student, such as room and board, books, supplies,
equipment, and transportation. These additional expenses can increase your child's cost of attending college by a substantial
amount.(This is a hypothetical example for illustrative purposes only.)
Source: “The real cost of higher education,” SavingforCollege.com & The College Board®
(http://www.savingforcollege.com/tutorial101/the_real_cost_of_higher_education.php)
Undergraduate Budget
Average Estimated Full-Time Undergraduate Budgets
(Enrollment-Weighted) by Sector, 2016-17
SOURCE: The College Board, Trends in College Pricing 2016, Figure 1
For detailed data, visit: trends.collegeboard.org.
Trends in College Pricing 2016
How are
Familiesand
Paying
for College?
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Parent income & savings are the #1 source of college funding, surpassing
scholarships & grants for the first time since 2010.*
Parent Income
& Savings 32%
Relatives &
Friends - 5%
Scholarships &
Grants - 30%
Student
Income &
Savings - 11%
Student
Borrowing 16%
Parent
Borrowing - 6%
Source: How America Pays for College 2015 National Study by Sallie Mae & Ipsos
(https://www.salliemae.com/plan-for-college/how-america-pays-for-college/)
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“HOW DO I START
SAVING FOR
COLLEGE?”
Starting Early
Help
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andCan
tables
Start with regular contributions - and put time on your side.
This hypothetical example illustrates the potential future values of different regular monthly investments for different time periods and
assumes an annual investment return of 6% with an initial investment of $2,500 and no withdrawals during the relevant time period. It is
presented for illustrative purposes only and does not reflect actual performance or predict future results. Account values will fluctuate
with market conditions and the specific investment portfolios selected.
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Here are some of the available savings options
Tax-Advantaged
Education Savings
Investments
Taxable Savings
& Investments
Other
529 College Savings Plans
Coverdell Educational
Savings Accounts
UGMA / UTMAs
Bank Savings Accounts
Mutual Funds & Securities
Life Insurance
Retirement
Accounts
Insurance Policy
Loans
Definition of 529 College Savings Plans
A 529 College Savings Plan is a tax advantaged investment vehicle designed
to encourage saving for future higher education expenses with after-tax
dollars.
529 college savings plan:
• Named from section 529 of the IRS tax code
• Most states have one, some have multiple
• Usually Administered by a government agency, like treasury or office of
higher educations
• Government agency selects a plan manager, usually a financial services
firm to oversee the investments and recordkeeping of the plan
• All potential growth is based upon market performance of the investment
options inside the savings plan.
• Direct sold- sold directly from the state to the client, usually has
lower fees.
• Advisor sold- Must be opened thru a financial advisor, typically
involves a commission.
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Federal & State Tax Benefits of 529 College Savings Plans
 Any earnings can grow tax deferred

Any earnings can grow federal and state income tax deferred until
withdrawn.
 Some states offer a state income tax credit or deduction on plan
contributions
 Qualified withdrawals for higher education are federal and state
income tax free*

Funds can be used for tuition, fees, certain room and board costs,
books, supplies, and computers
 Can be used at any eligible, accredited post-secondary
institution** in the U.S. and at some abroad: 2- and 4-year
colleges, graduate schools (including medical and law), and
technical/vocational institutes
• * Any earnings on non-qualified withdrawals may be subject to federal and state income taxes and the 10% federal tax.
• ** Any school that appears on the Federal School Code Lookup list maintained by the U.S. Department of Education at www.fafsa.gov
The Power of Tax-Advantaged Investing
Savings results are based on a $7,500 lump sum initial investment with subsequent $100 monthly ($1,200 annual)
contributions, growing at a hypothetical7% compounded annual rate of return. The taxable results assume an
annual federal tax rate of 28% and the earnings on the taxable amount are taxed annually. All results assume no
withdrawals are made. Your investment will vary and may perform better or worse than these hypothetical
examples, which are for illustrative purposes based on market performance only and do not predict future values
or guarantee future results
Components of a 529 College Savings Plan
Mom
Dad
Brother
Child
Grandchild
Yourself
Sister
Grandparent
Aunt
Loved one
Friend
Anyone
Account Owner
Beneficiary (Future Student)
- No income limitations
- No age restrictions
- No state residency required
- No time restrictions
- Full control
- No state residency requirement
- US citizen/resident alien
- Beneficiary can be changed to
- Corporations, entities & trusts
with valid tax ID numbers
another eligible family member
- US Citizen/Resident Alien
A College Education
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FAQ: What if the Beneficiary doesn’t attend college?
If the Beneficiary does not attend college, the Account Owner can:


Leave the money in the account until a later date
Change the beneficiary to an eligible “member of the family” (as per
the respective 529 College Savings Plan Disclosure Booklet)
Make a non-qualified withdrawal – Any earnings on non-qualified withdrawals
may be subject to federal and state income taxes and the 10% federal tax.*
*Withdrawals due to death, disability, scholarship, or attendance at a military academy:
subject to federal income tax on earnings, but not the 10% federal penalty.
FAQ: What
is the impact
Financial Aid?
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Parent-owned 529 plan assets have a relatively small effect
on financial aid eligibility.
 529 plan assets are considered assets of the Account Owner on the Free
Application for Federal Student Aid (FAFSA).
 If the Account Owner is a parent/guardian, 529 plan assets are factored into
the EFC (Expected Family Contribution) at a rate of 5.6% – just like any other
parental asset – v. 20% for student assets.
 If the Account Owner is a grandparent or non-parent, 529 plan assets will not
be factored into the EFC, BUT 529 plan distributions will be considered
income to the student and may affect future financial aid consideration.
 The treatment of investments in a 529 savings plan varies by school. Assets
are typically treated as the account owner's and not the student's. Any
investments, including those in 529 accounts, may affect the student's
eligibility to get financial aid based on need. You should check with the
schools you are considering regarding this issue. Please consult a financial
aid advisor and tax professional for more information.
Minnesota College Savings Plan – est. 2001
• Minnesota Office of Higher Education has partnered with TIAACREF Tuition Financing, Inc. to serve as the plan manager of the
state’s direct sold 529 college savings plan.
• The Minnesota College Savings Plan has been in existence since
2001, that whole time TIAA-CREF Tuition Financing, Inc. has served
as the plan manager.
• The plan’s assets are $1.2 billion*
• There are 63,839 accounts established*
• The average account size is $19,451*
• One of the lowest cost 529 College Savings Plans.
* Numbers as of December 31, 2016
Minnesota Office of Higher Education: Plan Administrator
The Minnesota Office of Higher Education is a government agency established to
improve Minnesotans’ access to higher education information.
The office oversees and distributes information on:
• Student Loans
• Scholarships & Grants
• Financial Aid
• Research, trends & financial data
• Minnesota College Savings Plan
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TIAA-CREF Tuition Financing, Inc.: Program Manager
TIAA
Started in 1918 with the vision of
philanthropist Andrew Carnegie.
We have a long history of serving the
investment management and retirement
needs of higher education & non-profits
TIAA-CREF Tuition Financing, Inc. (TFI)
An affiliate of the TIAA group of companies
529 industry pioneer managing 529 College Savings
Programs for States since 1998
An industry leader managing 10 State programs with
more than $22 billion in 529 plan assets under
management as of December 31, 2016
Choosing the Best Investment Option

Choose one or a combination of the 11 investment options

Allocate new contributions to any option, each contribution
needs to be $25 ($15 for payroll deduction)

Transfer between options twice per calendar year for the same
beneficiary or upon a change of beneficiary
*Note:
The investment approaches described are not recommendations and do not take into consideration personal goals or
preferences.
After evaluating all the information, the ultimate decision is up to the account owner.
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Investments in the Minnesota College Savings Plan
The Minnesota College Savings Plan has 11 investment options to choose
from, depending upon your investment tolerance. For additional
information on the investment options please go to our website
www.mnsaves.org
Investment Options include:
- Managed Allocation (9 different age bands, which automatically changes
to a more conservative model as the child ages)
Aggressive:
Moderate:
Conservative:
• Aggressive Allocation
• Moderate Allocation
• Conservative Allocation
• US Large Cap Equity
• 100% Fixed-Income
• Money Market
• US & Intl Equity
• Equity & Interest
Accumulation
• Principal Plus Interest
• Intl Equity Index
Low cost college savings plan
Because the MN college savings plan is a direct sold plan, more of your
investment can go toward education expenses, and not to sales
commissions or account maintenance fees.
• Depending on the investment option there is an annual assetbased management fee of just $1.97-$3.37 per every $1,000 (low
0.19-0.33% fee)
– Management fee is used to cover the cost of investment management and
administration services
Review the plan disclosure booklet or visit mnsaves.org for a list of fees and descriptions
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No Other Fees or Charges
 No application fee
 No transfer fee
 No commissions paid on accounts
 No sales fees
 No annual account maintenance fee
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Saving is easy with the MN College Savings Plan
Just follow these steps to open an account:
1
Gather information needed to open
•
•
•
Social Security/Tax Payer numbers
Date of Birth
Home Address
2
Go to mnsaves.org: click open an account
or
Print Application
4
Click Submit
Or
Mail to Address
3
Fill out online or paper application (sections include)
•
•
•
•
•
Congratulations… You’re Done!
Account owner
Beneficiary
Contingent Account Owner
Investment Options
Contribution amount/frequency
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Establishing Payroll Deductions
Fill out the payroll contribution/direct
deposit form
No
Yes
Do you have a self service
payroll portal
Log into your HR self service
portal and enter in account
number and routing number
provided, just like any other
direct deposit
Mail the payroll
deduction form
Make a copy of the form
Give the copy of the form to your
HR/Payroll department.
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Summary of Plan Benefits
There are many benefits in choosing Minnesota’s 529 College Savings Plan to
help save for a loved one’s future college education:
 Tax-free withdrawals for qualified college expenses
 Flexible to use at any eligible institution in the nation for tuition, certain room & board
expenses, books, fees, required supplies, computers and internet services.
 Choice of low fee investment options
 Transferable to another eligible family member
 Account Owner retains control
 Only $25 to get started. $15 for payroll deduction
 Makes a great gift
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Presenting a 529 as part of
an overall effort to help
employees manage their
financial health can be an
attractive part of any
benefits package
Minnesota College Savings Plan is good for Employers
Company advantages
• Differentiates your benefits package
• Helps employees save for higher education
• Is simple to administer- no cost to your company
• Complements your 401(k), 403(b), 457 or other savings
program
• Full customer support
• Improved employee engagement and retention
• No open enrollment period
• Can customize the benefit
Minnesota College Savings Plan is good for Employees
Employee Benefits
• Tax advantaged savings
• Portable plan from job to job
• Payroll contribution option (if employer offers)
• Easy way for families to start saving for higher
education
• Low-cost investments managed by TIAA
• Account owner has complete control entire
time account is open
• Low contribution minimums
Tailor made to fit your company
The Minnesota College Savings Plan can be offered to your employees in a variety of ways to
better suite your company and employees– here are just a few ways to implement
Minimalist Approach: Make benefit known, but very hands off
• Have enrollment materials available in HR office
• Have website (www.mnsaves.org) on benefits page
Middle of the Road: Minimalist approach plus a little more
• Have a representative available at benefit fairs
• Coordinate a webinar/seminar
• Offer payroll contribution
Proactive: Everything above, plus
• Have someone come to organization for 1 -1 meetings with employees
• Offer Lunch and Learns
• Customizable flyers
Is it right for you?
Things to think about before offering this to your employees
• Does saving for college align with your company’s values?
• Demographics
• How many of your employees would potentially take advantage of this benefit?
# of employees __________
# of employees with children _________
# of employees with grandchildren _______
• What part of the 529 plan would resonate the most with your employees?
• Is now the right time to offer the benefit?
• Can the HR/payroll departments handle a new direct deposit option?
• What level of engagement with the 529 plan is right for the company?
Minnesota graphs
College Savings
Plan: Contact Us
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and tables
Questions & Answers
How can we help?
Chris McLeod
529 Specialist Field Consultant
TIAA-CREF Tuition Financing, Inc.
Phone: 952.830.3127
Email: [email protected]
mnsaves.org
Importantand
Disclosures
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Before investing in a 529 plan, you should consider whether the state you or your designated
beneficiary reside in or have taxable income in has a 529 plan offering favorable state
income tax or other benefits only available if you invest in that state’s 529 plan.
Neither TIAA-CREF Tuition Financing, Inc., nor its affiliates, are responsible for the content
found on any external website links contained herein.
Consider the investment objectives, risks, charges and expenses before investing in the
Minnesota College Savings Plan. Please visit www.mnsaves.org for a Plan Disclosure
Booklet containing this and other information. Read it carefully. Investments in the Plan
are neither insured nor guaranteed and there is the risk of investment loss.
Taxpayers should seek advice based on their own particular circumstances from an
independent tax advisor. Non-qualified withdrawals may be subject to federal and state
taxes and the additional federal 10% tax.
TIAA-CREF Tuition Financing, Inc., Program Manager. TIAA-CREF Individual & Institutional
Services, LLC, member FINRA, distributor and underwriter for the Minnesota College
Savings Plan.
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