for educational and informational purposes only. © 2007 lincoln national corporation ubp-0047-07...

For educational and informational purposes only.

© 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953

Success is an attitude

Get ready for retirement!

Presenter Name

Title

June 7, 2007



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Lincoln Financial Distributors, Inc. presents this seminar for educational and informational purposes only. We have made every effort to ensure its accuracy. It is presented with the understanding that we are not engaged in rendering legal or tax advice.

While this seminar discusses general tax aspects and investment concepts, we make no representation as to suitability for individual clients. Interested parties should seek their own tax and legal advice before implementing a plan of the type described in this presentation.



The new retirement

Growing old is no more than a bad habit which a busy man has no time to form.

— André Maurois



What would you like to get out of today’s program?



The transformation of retirement

Agenda

The five challenges

Solutions to the revolution

Introduction

Transformation of retirement

Retirement challenges

Solutions

Conclusion



The retirement generation gap

Longer retirement

• In 1950, retirement started later and ended earlier

than it does now.

• Today, retirement is lasting 20, 30, even 40 years!

Introduction



Solutions

Conclusion

Chances of a 65-year-old living to age 90




Healthier, more active lifestyles

• More flexibility

• Greater control

• Lifetime income

Introduction



Solutions

Conclusion




Decline of traditional retirement income sources

• Social Security

• Corporate pensions

• Medicare

Introduction



Solutions

Conclusion




Portfolio management structuring

• In the past, income management was sufficient.

• Now we need continued accumulation and protection of retirement assets.

Introduction



Solutions

Conclusion



Greater freedom in retirement requires:

• Greater stability of income

• Control

• Flexibility

Introduction



Solutions

Conclusion

Retirement challenges are a-changin’, too



The face of retirement challenges

Changing sources of income

Where will all your income come from?

20.7%Earnings

Asset income

Social Security

Other

Introduction



Solutions

ConclusionWhere will all your income come from?

37.6%

18.7% 3.1%

19.9%Employerbenefits

1

Data source: U.S. Bureau of Labor Statistics, 5/07



The five retirement challenges

Your income must last your lifetime

Simulation estimates the rangeof possible outcomes by using the historical 1926–2004 annual average return and standard deviation figures for the asset classes and inflation.

These projections do not take into account other variables such as fluctuating principal and changing tax consequences. No assurance can be given that the assumptions will prove to be correct, and the difference between assumptions and actual results could vary materially.

Indexes used: Stocks, S&P 500 Index; Bonds, 5-year U.S. Government Bond Index. Government bonds are guaranteed by the full faith and credit of the United States government as to the timely payment of principal and interest, while returns and principal invested in stocks are not guaranteed. The above indexes are unmanaged and unavailable for direct investment. Index past performance cannot guarantee future returns.

Introduction



Solutions

Conclusion

2

Chances of your income lasting throughout a 25-year retirement




Maintaining your standard of living

Hotel stay 1976–2006 6.38% $0.28

Dining out 1965–2006 4.90% $0.16

Admissions to movies,theater, concerts, and 1978–2006 5.07% $0.32sporting events

Avg. annual $1 equalsExpense Time period inflation rate (2003)

Introduction



Solutions

Conclusion

3

Cost of inflation

Source: U.S. Dept. of Labor Statistics, 2007Most recent data available




Managing market volatility Introduction



Solutions

Conclusion

4

Positive and negative years of the S&P 500 Index (1926–2006)

-40

-20

0

20

40

60

80 Positive 71.6%

Negative 28.4%




Rising healthcare costs

• Employer health insurance premiums rose 7.7% in 2006 — twice the rate of inflation.1

• A growing number of employers offering health benefits offer a plan with a minimum deductible of $1,000.2

• The number of large firms (200+ employees) offering retiree health benefits is only 35%, down from 66% in 1988.2

1National Coalition on Health Care, “Facts on Health Care Costs,” 2007.2“Employer Health Benefits 2006 Summary of Findings,” Kaiser Family Foundation.

Introduction



Solutions

Conclusion

5



A time to sow, a time to reap

Revolutionary income management

Variable expenses — travel, leisure activities, gifts, etc.

Fixed expenses — mortgage, utilities, monthly healthcare and prescription costs, and other regular bills

Wealth transfer — assets designated for your heirs

Healthcare — assets cover expenses beyond routine prescription and doctors bills, such as an emergency and long-term care

Emergency/Opportunity funds — immediate cash for emergencies or financial opportunities

Introduction



Solutions

Conclusion



Finding potential solutions

Introduction



Solutions

Conclusion

A shifting income portfolio for your evolving retirement income needs

Variable expenses

Fixed expenses

Wealth transfer

Healthcare

Emergency/Opportunity funds




Income strategy allocation

• Growth

• Fixed

• Insured

• Liquid

• Miscellaneous

Introduction



Solutions

Conclusion




Growth

• Greater returns; higher risk

• Help maintain accumulation potential

• Greater growth potential

• Tax advantages

Introduction



Solutions

Conclusion




Fixed

• Provide fixed, stable income and returns

• Subject to some risk

• Good for fixed expenses

• May be appropriate for conservative investors seeking wealth transfer

• Tax advantages

Introduction



Solutions

Conclusion




Insured

• Fixed and growth orientation

• Insurance component with guarantee

• Generally cost more

• Tax advantages

Guarantees are backed by the financial strengthof The Lincoln National Life Insurance Company.

Introduction



Solutions

Conclusion




Liquid

• Easy and quick access to your money

• Lower risks and returns

• Traditionally used for emergency funding

Introduction



Solutions

Conclusion




Miscellaneous

• Provide regular income

• Growth and wealth potential

• Estate benefits

Introduction



Solutions

Conclusion




Several solutions do exist! Introduction



Solutions

Conclusion




Changing sources of income

• Create diversified portfolio

• Flexibility in how you take income

• Steady payments to you from guaranteed sources of income

Introduction



Solutions

Conclusion


1




Income longevity

• Guaranteed lifetime income streamsfrom annuities

• Stable income

• Potential for higher returns

Annuities contain both investment and insurance components, and have fees and charges, including mortality and expense risk, administrative, and advisory fees. Optional features and death benefits are available, and may be purchased for an additional charge.

Introduction



Solutions

Conclusion


2




Maintaining your lifestyle

• Use stocks or stock mutual funds

• Decide how to spend down assets

• Consider tax-advantaged investmentsand financial products

• Shift 401(k) and other tax-deferredassets to IRA

Introduction



Solutions

Conclusion

3




Managing market volatility• No matter how the market performs, you can

receive a lifetime income.

• You have the control to design a more conservative portfolio.

• Optional features and death benefits may be available and can be purchased for an additional charge.

Introduction



Solutions

Conclusion


4




Containing medical costs

• Long-term care insurance

Introduction



Solutions

Conclusion

5



Get together with your advisor

Types of investment and financial products

• Life insurance

• Long-term care insurance

• Annuities

• Mutual funds

• Individual stocks

• Individual bonds

• Qualified plans: 401(k), 403(b), etc.

Introduction



Solutions

Conclusion



Summary

Retirement is being revolutionized

5 retirement challenges

Solutions

Introduction



Solutions

Conclusion



What’s next?

Start now

Talk with your financial advisor

Introduction



Solutions

Conclusion



Important information

This material was prepared to support the promotion and marketing of insurance and investment company 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.

Investment company products are sold by prospectus. Investors should consider the investment objectives, risks, and charges and expenses of the investment company carefully before investing. A prospectus contains this and other important information about the investment. To request a prospectus call 877 533-0003 or obtain one from your investment representative. Please read it carefully before you invest or send money.

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.

for educational and informational purposes only. © 2007 lincoln national corporation ubp-0047-07...

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