Alternatives for Saving

There are a number of saving alternatives to help you fund educational expenses:

Mutual Funds

Mutual Funds offer many benefits that make investing for higher education easy and effective:

• Convenience. Investments may be made directly from your checking or savings account.
• Diversification. Diversify your investment into bonds, stocks or a combination of both.
• Tax Advantages. Tax rates for long-term capital gains are significantly less than standard income tax rates.

» More about mutual funds

Life Insurance

Cash value life insurance has many attractive aspects, making it a basic element of any higher education funding plan:

• Tax-deferred cash value build-up can be used to fund higher education costs.
• Guaranteed access to cash values (subject to interest charges).
• Peace of mind that comes with knowing funds will be available for your child's higher education costs should you pass away.
• Possibility for increased financial aid.

Note: Loans and withdrawals may reduce the amount of life insurance benefits paid to your beneficiary.

» More about life insurance

Retirement Plans

While retirement plans are not designed for college funding, the pre-tax contributions and tax deferral on earnings make qualified retirement plans another way to accumulate college funds. Also, assets held in these plans are usually not included in asset calculations for financial aid.

Retirement plans include:

• Roth IRAs
• Traditional IRAs
• 401(k) plans
• Pension plans

Keep in mind that many qualified plans do not allow for loans or withdrawals. Also, withdrawals taken early may be subject to IRS penalties and surrender charges, and income tax accessed.

» More about retirement solutions

Certificate of Deposits (CDs)

Certificates of deposit (CDs) are available through Banks and Savings & Loans. The security and predictability of CDs make them an attractive savings vehicle, especially for the more conservative investor. These vehicles are FDIC Insured.

» More about CDs from Principal Bank

For more complete information about Principal Investors Fund, Inc. including charges and expenses, call for a free prospectus. Read the prospectus carefully before you invest or send money.

Investment products and insurance are not FDIC-insured, are not products or obligations of the bank and are not guaranteed by the bank. Investment products involve risk, including the possible loss of the principal amount invested.