LIFE SOLUTIONS

Retirement planning for tax efficiency

Life strategies to help protect wealth

Presenter name

Presenter title

Date of presentation Products issued by: The Lincoln National Life Insurance Company Lincoln Life & Annuity Company of New York LCN-759997-112513

For agent or broker use only. Not for use with the public.

©2013 Lincoln National Corporation

We focus on the affluent client and take a holistic approach to wealth accumulation through protection. Lincoln provides strategies and products to take clients from the accumulation phase to the retirement-spending phase, protecting wealth so that it passes on to the next generation.

For agent or broker use only. Not for use with the public.

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FOCUS ON MAXIMIZING RETIREMENT DISTRIBUTIONS

Advisors indicate that only 55% of their clients have a retirement

income

plan.

Source: Cogent Research, The Cogent Discovery Series: Advisor In-Retirement Income TM , 2013.

For agent or broker use only. Not for use with the public.

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AGENDA Tax exposure of assets Diversification of distributions Wealth protection

For agent or broker use only. Not for use with the public.

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TAX EXPOSURE OF ASSETS

A major factor in retirement

income

planning

Source:

The Wall Street Journal,

MarketWatch, “ 10 Reasons Your Retirement Plan Won’t Cut It,” http://www.marketwatch.com/story/10-reasons-your-retirement-plan-wont-cut-it-2013-10-07, October 7, 2013.

For agent or broker use only. Not for use with the public.

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TAX EXPOSURE OF ASSETS

Not all assets selected in the accumulation phase are ideal for the distribution phase.

Retirement

Accumulation phase Distribution phase

For agent or broker use only. Not for use with the public.

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RETIREMENT SOLUTIONS

Government restrictions

401(k)s, IRAs, etc.

Tax-deferred

Municipal bonds, Roth IRAs

For agent or broker use only. Not for use with the public.

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RETIREMENT SOLUTIONS

Government restrictions IRS

401(k)s, IRAs, etc.

Tax-deferred

Stocks, bonds, mutual funds, etc.

$$ Taxes Taxable Income tax-free

Municipal bonds, Roth IRAs

Tax advantaged For agent or broker use only. Not for use with the public.

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NEW TAX INCREASES — AMERICAN TAXPAYER RELIEF ACT (ATRA)

Government restrictions

401(k)s, IRAs, etc.

IRS Top tax rate +4.6% Medicare +0.9% Personal Exemption Phaseout (PEP) & PEASE

1

+10.0%

Stocks, bonds, mutual funds, etc.

Tax-deferred

Municipal bonds, Roth IRAs

Taxable Tax advantaged Capitals gains +5.0% UIMCT

2

(ACA) +3.8% $$ Taxes Income tax-free

1 Itemized Deductions Phaseout (Pease) — The Pease provision (named after former Congressman Donald Pease who sponsored the legislation) reduces the value of itemized deductions by 3% of the amount that adjusted gross income (AGI) exceeds $300,000 for joint filers and $250,000 for individuals. 2 Unearned Income Medicare Contribution Tax (UIMCT) — A 3.8% surtax on unearned income for taxpayers whose total modified adjusted gross income (MAGI) exceeds $250,000 for joint filers or $200,000 for individuals. This tax affects interest, dividends, capital gains, annuities, royalties and rents.

For agent or broker use only. Not for use with the public.

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TAX EXPOSURE OF ASSETS

Government restrictions IRS

Distributions 401(k)s, IRAs, etc.

Tax-deferred $$ Taxes

Stocks, bonds, mutual funds, etc.

Taxable Income tax-free

Municipal bonds, Roth IRAs

Tax advantaged For agent or broker use only. Not for use with the public.

LCN-759997-112513

TAX EXPOSURE OF ASSETS Age

59½

Age

62

Age

65

Age

70½

Ordinary income tax + 10% penalty* Tax-deferred bucket becomes taxable Too much Modified Adjusted Gross Income: 85% of SS benefits taxed Too much Modified Adjusted Gross Income: Medicare Part B costs increase from $105 to $336/month RMDs add to tax exposure *The 10% penalty is applicable for withdrawals from qualified plan and IRA accounts before age 59 ½.

For agent or broker use only. Not for use with the public.

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DIVERSIFICATION OF DISTRIBUTIONS

Diversify to protect wealth with Lincoln life insurance.

Tax-deferred growth No contribution limits Income tax-free distributions* No penalties for early retirement Nonreportable income An income tax-free legacy *Loans and withdrawals will reduce the policy ’ s cash value and death benefit.

For agent or broker use only. Not for use with the public.

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DIVERSIFICATION OF DISTRIBUTIONS

Rick, age 45, $500K annual income, purchases a Lincoln life insurance policy.

Age

59½

Age

62

Age

65

Age

70½

Income tax-free distributions, no penalties No income tax No impact on SS benefits No impact on Medicare Part B No RMDs

When he dies…his family has an income tax-free legacy.

For agent or broker use only. Not for use with the public.

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DIVERSIFICATION OF DISTRIBUTIONS TO THE NEXT GENERATION

Retirement Legacy Effective retirement planning is focused on distributions.

Accumulation phase Distribution phase

For agent or broker use only. Not for use with the public.

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HOW LINCOLN CAN HELP

Why Lincoln?

Our focus:

• • • Wealth accumulation through protection for affluent clients Retirement income Long-term care protection Wealth transfer solutions The breadth and depth of our product portfolio Expertise and support for your business

For agent or broker use only. Not for use with the public.

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HOW LINCOLN CAN HELP

Take charge with wealth protection solutions for your clients.

Contact your Lincoln representative.

For agent or broker use only. Not for use with the public.

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THANK YOU This material was prepared to support the promotion and marketing of investment and insurance products. Lincoln Financial Group ® affiliates, their distributors, and their respective employees, representatives, and/or insurance agents do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Please consult your own independent advisor as to any tax, accounting, or legal statements made herein. Lincoln life insurance policies are issued by The Lincoln National Life Insurance Company, Fort Wayne, IN, and distributed by Lincoln Financial Distributors, Inc., a broker-dealer.

The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so.

Policies sold in New York are issued by Lincoln Life & Annuity Company of New York, Syracuse, NY, and distributed by Lincoln Financial Distributors, Inc., a broker-dealer.

All guarantees and benefits of the insurance policy are subject to the claims-paying ability of the issuing insurance company.

They are not backed by the broker-dealer and/or insurance agency selling the policy, or any affiliates of those entities other than the issuing company affiliates, and none makes any representations or guarantees regarding the claims-paying ability of the issuer.

Products, riders and features are subject to state availability. Limitations and exclusions may apply. Check state availability.

Not a deposit Not FDIC-insured May go down in value Not insured by any federal government agency Not guaranteed by any bank or savings association LincolnFinancial.com

Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.

Affiliates are separately responsible for their own financial and contractual obligations.

1/14 Z05

Order code: LIF-TAX-PPT002

CWI130433

For agent or broker use only. Not for use with the public.

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