Using today’s wealth for tomorrow’s goals

1. Using today’s wealth for tomorrow’s goals Strategies to prepare for college, retirement, taxes, and wealth preservation.

2. Funding college education

3. College costs are rising Four years of tuition, room, and board Figures include tuition, fees, room, and board. Estimated growth rate of 5.0%. Sources: The College Board, Trends in College Pricing, 2017.

4. College debt is also rising Sources: Trends in Student Aid, 2017; Education Pays, 2016 (The College Board).

5. A 529 college savings plan has many benefits • Tax advantages: Account grows taxfree, and there are no taxes on funds withdrawn for qualified higher education expenses • Control: Investor controls account assets after the beneficiary reaches legal age • Flexibility: Anyone can contribute — parents, grandparents, other family members, friends Do you have existing custodial (UGMA/UTMA) accounts? Converting a custodial account to a 529 can help you benefit from tax advantages while increasing a child’s eligibility for financial aid.

6. Estate planning Grandparent uses Putnam 529 for AmericaSMto lower estate tax Contribution to 529 plans* Grandparents$750,000 $150,000 $150,000 $150,000 $150,000 $150,000 Ω Ω Ω Ω Ω * Married couples filing jointly may contribute up to $150,000 per beneficiary. Individuals may contribute up to $75,000. Contributions are generally treated as gifts to the beneficiary for federal gift tax purposes and are subject to annual federal gift tax exclusion amount ($15,000 for 2018). Contributor may elect to treat contribution in excess of that amount (up to $75,000 for 2018) as pro-rated over 5 years. Election is made by filing a federal gift tax return. While contributions are generally excludable from contributor’s gross estate, if electing contributor dies during 5-year period, amounts allocable to years after death are includible in contributor’s gross estate. Consult your tax advisor for more information.

7. Minimizing taxes

8. Current tax rates Tax rates reflect highest marginal rate and incorporate additional taxes related to the health-care reform law. Health-care-related taxes include a surtax of 3.8% on net investment income and an additional 0.9% payroll tax affecting single filers with income in excess of $200,000, and joint filers with income in excess of $250,000. Highest marginal tax rate on income, capital gains, and dividends apply to tax payers with taxable income above $500,000 ($600,000 for couples).

9. Total debt remains high based on historical norms Federal debt held by the public (% of GP), 1940–2017 Percentage of GDP 2017 Source: Congressional Budget Office, Updated Budget Projections: August 2014; does not include intra-governmental debt.

10. The aging of America will further strain the system Total U.S. population age 65+ 98 million 48 million Today 2060 Source: U.S. Census Bureau, Facts for Features, 2016.

11. New health-care taxes took effect in 2013 • Increase in the individual portion of the Medicare payroll tax on wages from 1.45% to 2.35% • New Medicare investment income tax of 3.8% • Will affect interest, dividends, capital gains, rental income • Distributions from retirement accounts are excluded • Interest from municipal bonds is not affected • Targeted at individuals with more than $200K income (couples with $250K income) • You’ll need to save:

12. Taxes on traditional retirement plans Income for expenses Federal income taxes A dollar inside a traditional (pretax) retirement savings account may only provide roughly 60¢ of income in retirement

13. Consider the benefits of a Roth IRA • Tax-free income in retirement • No required distributions • Heirs receive assets free from income taxes • Means to achieve tax diversification

14. Planning for income in retirement and transferring wealth

15. Longevity comes at a cost Amount needed to maintain purchasing power • 30 years • $50,000 income Inflation rate

16. When you retire can make a big difference Assumptions • $1 million nest egg • 5% withdrawn annually and increased each year to keep up with inflation • Invested in a portfolio of 60% stocks, 30% bonds, and 10% cash • Results over a 10-year time frame $1,861,592 $1,731,989 $1M $472,238 Retire in 1980 Retire in 1990 Retire in 2000 Sequence-of-returns risk refers to the adverse effect that negative investment returns in the early stages of retirement can have on a nest egg.

17. Create an income plan Early in your retirement Later in retirement Pensionincome Life insurance SocialSecurity Longevity insurance Realestate Investmentincome Retirement account withdrawals Immediateannuity Part/full -time work Long-term care insurance Investments are subject to market risk, including possible loss of principal.

18. How long would your money have lasted? Choose the right withdrawal rate Percentage of your portfolio’s original balance withdrawn each year 3%will last50 years 4%will last33 years 5%will last20 years 6%will last16 years 7%will last13 years 8%will last12 years 9%will last11 years 10%will last10 years This example assumes a 95% probability rate. These hypothetical illustrations are based on rolling historical time period analysis and do not account for the effect of taxes, nor do they represent the performance of any Putnam fund or product, which will fluctuate. These illustrations use the historical rolling periods from 1926 to 2016 of stocks (as represented by an S&P 500 composite), bonds (as represented by a 20-year long-term government bond (50%) and a 20-year corporate bond (50%)), and cash (U.S. 30-day T-bills) to determine how long a portfolio would have lasted given various withdrawal rates. A one-year rolling average is used to calculate performance of the 20-year bonds. Past performance is not a guarantee of future results. The S&P 500 Index is an unmanaged index of common stock performance. You cannot invest directly in an index.

19. Watch your asset allocation • 203% • Health-insurancepremiums How long would your money have lasted? 80%–100% probability 60%–79% probability 0–59% probability • 56% • Workers earnings The information at left shows how various asset allocations affect a portfolio’s expected longevity. It assumes that 5% of the original account balance is withdrawn each year and that withdrawals were increased each year to account for inflation. • 43% • Overall inflation This example assumed a 95% probability rate. These hypothetical illustrations are based on rolling historical time period analysis and do not account for the effect of taxes, nor do they represent the performance of any Putnam fund or product, which will fluctuate. These illustrations use the historical rolling periods from 1926 to 2016 of stocks (as represented by an S&P 500 composite), bonds (as represented by a 20-year long-term government bond (50%) and a 20-year corporate bond (50%)), and cash (U.S. 30-day T-bills) to determine how long a portfolio would have lasted given various withdrawal rates. A one-year rolling average is used to calculate performance of the 20-year bonds. Past performance is not a guarantee of future results. The S&P 500 Index is an unmanaged index of common stock performance. You cannot invest directly in an index.

20. Consider delaying Social Security if possible $2,660 $1,983 $1,394 Source: Social Security Quick Calculator benefit estimate based on an individual age 62 with $75,000 in current earnings. Does not include increases in benefit levels due to regular cost-of-living adjustments.

21. Pay attention to order This is not intended as tax advice. Please consult your independent tax advisor regarding tax ramifications. Dividend and capital gains rates reflect highest marginal tax rate (20%) plus the 3.8% net investment income surtax.

22. Stretching an IRA to create generations of wealth Annual required minimum distributions in selected years IRA owner’s wife dies at age 70, ten years after the IRA was created and before taking RMDs. Their 46-year old son begins receiving annual payments based on his life expectancy. He names his wife as his beneficiary. Value of IRA: $200,000. The son dies 29 years later. His wife continues the established distribution schedule. She may not treat the IRA as her own and no rollover is available. The IRA is depleted,having generated over $3 million in income. First year Year 10 Year 20 Year 30 Year 39 $12,019 $24,506 $54,566 $124,329 $270,526 Income is based upon an initial investment of $200,000 and cumulative annual distributions for 39 years. This hypothetical illustration assumes an 8% annualized return (8.30% effective return) and that distributions are kept to the required minimum. It does not represent the performance of any Putnam fund or investment or take into account the effect of any fees or taxes. Investors should consider various factors that can affect their decision, such as possible changes to tax laws and the impact of inflation and other risks, including periods of market volatility when investment return and principal value may fluctuate with market conditions. The Stretch IRA feature is designed for investors who will not need the money in the account for their own retirement needs.

23. Consider a bucket approach

24. Do you need an estate plan? • Do you have children who are minors? • Are all of your assets owned jointly with your spouse? • Are most of your assets in real estate, a business, or a retirement plan? • Do you have a durable power of attorney? • Do you have a living will/health-care proxy? • Do you own property in another state? • Do you have children from a prior marriage?

25. Stick to your plan: Important documents for staying in control Durable power of attorney Health-care proxy Will Revocable and irrevocable trusts

26. What are the next steps? ✓ Consider transferring existing custodial accounts to a 529 Fund a 529 to remove assets from your estate Use a Roth IRA to create tax-free income in retirementand avoid required distributions Consolidate retirement assets and develop an income plan Review legal documents like wills and trusts ✓ ✓ ✓ ✓

27. For informational purposes only. Not an investment recommendation. Putnam 529 for America is sponsored by the State of Nevada, acting through the Trustees of the College Savings Plans of Nevada and the Nevada College Savings Trust Fund. Anyone may invest in the plan and use the proceeds to attend school in any state. Before investing, consider whether your state's plan or that of your beneficiary offers state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that may not be available through Putnam 529 for America. If you withdraw money for something other than qualified higher education expenses, you will owe federal income tax and may face a 10% federal tax penalty on earnings. Consult a tax advisor. You should carefully consider the investment objectives, risks, charges, and expenses of the plan before investing. For an offering statement containing this and other information about Putnam 529 for America, call Putnam’s dedicated 529 hotline at 1-877-711-1890. You should read the offering statement carefully before investing. Putnam Retail Management, principal underwriter and distributor. Putnam Investment Management, investment manager. This information is not meant as tax or legal advice. Please consult your legal or tax advisor before making any decisions.