not fdic insured may lose value no bank guarantee this presentation is authorized only when...

Not FDIC Insured • May Lose Value • No Bank Guarantee

This presentation is authorized only when accompanied or preceded by a current Franklin Templeton 529 College Savings Plan Investor Handbook. Investors should carefully consider Plan investment goals, risks, charges and expenses before investing. To obtain the Investor Handbook, which contains this and other information, talk to your financial advisor or call Franklin Templeton Distributors, Inc., the manager and underwriter for the Plan at (800) 818-4030. You should read the Investor Handbook carefully before investing and consider whether your or the account beneficiary’s home state offers any state tax or other benefits that are only available for investments in its qualified tuition program.

A Smarter Way to Invest for College®

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414,311

What Do You Think This Number Represents?

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The Rising Cost of College Education

1. Source: The College Board, Trends in College Pricing © 2011 The College Board, www.collegeboard.com. Projected cost based upon child’s entrance to a four-year public or private college. As reported by the College Board for 2011–12, the $17,131 public college cost and $38,589 private college cost include tuition, fees, room and board. College cost inflation figures of 6.61% (public) and 4.93% (private) are based on the 10-year average annual increase in public and private college costs respectively, as reported by The College Board for 2011–12.

Projected Cost of a Four-Year College Education1

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Average Earnings in 2010, Based on Level of Education1

1. Source: U.S. Census Bureau, Current Population Survey, 2010 Annual Social and Economic Supplement.

Education Provides a Lifelong Value

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Agenda

• Putting Time on Your Side

• Ways to Invest for College

• A Smarter Way to Invest for College®

Putting Time on Your Side

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• John: $250/month for 15 years

• Mary: $612/month for 8 years

• Michael: $1,954/month for 3 years

What do you think Mary and Michael will have to contribute on a monthly basis to accumulate the same amount as John?

Don’t Delay the Inevitable

This is a hypothetical illustration to represent the effects of compounding assets monthly assuming an annual rate of return of 7%. It does not reflect an actual investment or any taxes payable upon withdrawal. A periodic investment does not assure a profit or protect against a loss in declining markets. Returns are not guaranteed and may be less than or greater than the amounts illustrated.

PUTTING TIME ON YOUR SIDE

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The Cost of Procrastination


Assumes an Annual Rate of Return of 7%

This is a hypothetical illustration to represent the effects of compounding assets monthly assuming an annual rate of return of 7%. It does not reflect an actual investment or any taxes payable upon withdrawal. A periodic investment does not assure a profit or protect against a loss in declining markets. Returns are not guaranteed and may be less than or greater than the amounts illustrated.

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Investing vs. Borrowing1

Projected Cost of a Newborn’s Public College Education ≈ $255,000

1. Source: The College Board, Trends in College Pricing © 2011 The College Board, www.collegeboard.com. Projected cost based upon child’s entrance to a four-year public or private college. As reported by the College Board for 2011–12, the $17,131 public college cost and $38,589 private college cost include tuition, fees, room and board. College cost inflation figures of 6.61% (public) and 4.93% (private) are based on the 10-year average annual increase in public and private college costs respectively, as reported by The College Board for 2011–12. Savings example assumes an 7% annualized rate of return with contributions made at the beginning of each period. The borrowing example assumes a fixed interest rate of 3.40% based on a subsidized Stafford loan issued between 7/1/2011–6/30/2012. Assumes payments are made at the beginning of each period.

a $195,604 differenceCost by investing$605 monthly for 18 years

Cost by borrowing the money for 15 years at 3.4%


Ways to Invest for College

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What is a 529 College Savings Plan?

A state-sponsored tuition program designed to provide tax incentives to encourage families to save for the high cost of a college education.

WAYS TO INVEST FOR COLLEGE

“Our daughter is only in preschool now but with the rising cost of a college education, it’s important for our family to invest in her future now.”

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529CollegeSavingsPlan

Room and board (if attending at least half time)

Required suppliesand equipment

Tuition

Fees

Books

Qualified Expenses


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Other College Savings Vehicles

• UGMA/UTMA

• Coverdell Education Savings Account


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529 COLLEGE SAVINGS PLAN UGMA/UTMACOVERDELL EDUCATIONSAVINGS ACCOUNT

Federal Tax Free

Yes. Money grows income tax free and qualified distributions are federal income tax free

No. Earnings are taxed at the parent’s or the minor’s rate

Yes. Money grows income tax free and qualified distributions are federal income tax free

Maximum Contribution

On average up to $300,000 or more per beneficiary1

None $2,000 per beneficiary under age 18 per year2,3

Income Limits

No limits No limits Phases out for single filers at $95,000 to $110,000; for joint filers, $190,000 to $220,000

Comparison Chart

1. Source: savingforcollege.com, October 2011.2. Except in the case of a Special Needs Beneficiary.3. Limits may be indexed for inflation in future years.


For 529 College Savings Plans: Tax benefits are conditioned on meeting certain requirements. Federal income tax, a 10% federal tax penalty, and state income tax and penalties may apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. See a 529 disclosure document for more complete information.

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529 COLLEGE SAVINGS PLAN UGMA/UTMACOVERDELL EDUCATIONSAVINGS ACCOUNT

Who Controls Assets?

Plan owner Custodian, until minor reaches age of majority (varies by state)

Responsible Individual

Ability To Change Beneficiary

In most instances, beneficiary can be changed to another member of the beneficiary’s family, without penalty

No Can be transferred to the account of an eligible member of the same family without tax consequences

Estate-Planning Features

Assets are generally transferred out of thedonor’s estate, yet thedonor retains control

Assets are transferred out of the donor’s estate

Assets are transferred outof the donor’s estate

Comparison Chart


For 529 College Savings Plans: Tax benefits are conditioned on meeting certain requirements. Gift examples are general; individual financial circumstances and state laws vary—consult a tax advisor before investing. If the contributor dies within the five-year period, a prorated portion of contributions may be included in their taxable estate. See a 529 disclosure document for more complete information.

1. Offered and administered by the New Jersey Higher Education Student Assistance Authority (HESAA); managed and distributed by Franklin Templeton Distributors, Inc., an affiliate of Franklin Resources, Inc., which operates as Franklin Templeton Investments. No federal or state guarantee. Principal value may be lost, and investing in the plan does not guarantee admission to college or sufficient funds for college. Please refer to the Investor Handbook for more complete information.

A SMARTER WAY

TO INVEST

FOR COLLEGE®

Franklin Templeton 529 College Savings PlanOFFERED NATIONWIDE BY THE NEW JERSEY HIGHER EDUCATION STUDENT ASSISTANCE AUTHORITY1

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Tax Advantages

• Earnings grow federal income tax free

• Qualified withdrawals are free from federal income tax

• Contributions receive favorable giftingand estate tax treatment

A SMARTER WAY TO INVEST FOR COLLEGE®

Tax benefits are conditioned on meeting certain requirements. Federal income tax, a 10% federal tax penalty, and state income tax and penalties may apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. Gift examples are general; individual financial circumstances and state laws vary—consult a tax advisor before investing. If the contributor dies within the five-year period, a prorated portion of contributions may be included in their taxable estate. See the Investor Handbook for more complete information.

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Each plan account is subject to a $25 annual maintenance fee, an annual program management fee of 0.40% of assets, underlying fund expenses, currently up to 0.88% of assets, which may vary, and sales charges, which vary by class of shares. See the Investor Handbook for more complete information.

Additional Benefits

• No income restrictions

• Control over assets

• Wide range of colleges and technical programs

• Low contribution requirements

• High contribution limits

• Professional Investment Management1


1. The plan is managed by Franklin Advisers, Inc., an affiliate of Franklin Templeton Distributors, Inc. Plan portfolios generally invest in mutual funds managed by affiliates of Franklin Advisers, Inc.

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Age-Based Asset Allocations1


1. An investment in Franklin Templeton 529 College Savings Plan is an investment in a municipal security that may invest in one or more underlying mutual funds. It is not an investment in shares of the underlying mutual fund(s). Asset allocation, diversification and rebalancing do not guarantee a profit or protect against loss.

Domestic Equity International Equity Income Cash

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Objective-Based Asset Allocations1



Franklin Income Fund

Templeton Growth Fund

Mutual Shares Fund

Founding Funds 529 Portfolio Corefolio® 529 Portfolio

331/3%25%

25%

25%

25%

Franklin Flex Cap Growth Fund

Templeton Growth Fund

Mutual Shares Fund

Franklin Growth Fund

331/3%

331/3%

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40%

35%

15%

10%

Objective-Based Asset Allocations1

Growth 529 Portfolio Growth & Income 529 Portfolio Income 529 Portfolio

80%

20%30%

70%



Domestic Equity International Equity Income Cash

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Individual Portfolios1

GROWTH

Franklin Growth 529 Portfolio

Franklin Small-Mid Cap Growth 529 Portfolio

GLOBAL

Templeton Growth 529 Portfolio

VALUE

Mutual Shares 529 Portfolio

PRINCIPAL PRESERVATION

Franklin Templeton Stable Value 529 Portfolio

HYBRID

Franklin Income 529 Portfolio

INDEX STYLE

S&P 500 Index 529 Portfolio

The Franklin Templeton Stable Value 529 Portfolio is not insured or guaranteed by the FDIC or any other government agency and, while it seeks to preserve the value of investments, it is possible to lose money by investing in the portfolio.



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Let’s Review

Higher Education Leads to OpportunitiesInvesting in a college education is an expense you can afford.

Put Time on Your SideStart small if you have to, but start now.

Ways to Invest for College529 plans offer a wider range of benefits than traditional college savings vehicles.

A Smarter Way to Invest for College®

Franklin Templeton 529 College Savings Plan makes it easy for you to get started and begin saving for college.

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Educate yourself.

Benefit from a financial advisor.

Start investing today in Franklin Templeton 529 College Savings Plan.

Take Action Today

It’s as easy as 1, 2, 3

Franklin Templeton Distributors, Inc.One Franklin ParkwaySan Mateo, California 94403-1906(800) 818-4030franklintempleton.com

529 SEM 12/11Logos are trademarks of their respective owners. Logos are used to identify their respective companies and should not be construed as an endorsement of, or affiliation with, Franklin Templeton Investments.© 2011 Franklin Templeton Investments. All rights reserved.

This presentation is authorized only when accompanied or preceded by a current Franklin Templeton 529 College Savings Plan Investor Handbook. Investors should carefully consider Plan investment goals, risks, charges and expenses before investing. To obtain the Investor Handbook, which contains this and other information, talk to your financial advisor or call Franklin Templeton Distributors, Inc., the manager and underwriter for the Plan at (800) 818-4030. You should read the Investor Handbook carefully before investing and consider whether your or the account beneficiary’s home state offers any state tax or other benefits that are only available for investments in its qualified tuition program.

not fdic insured may lose value no bank guarantee this presentation is authorized only when...

Documents

college slide

college board

public college cost

college pricing

fouryear college education

private college costs

college cost inflation

projected cost