1. 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

2. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Please read 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.

3. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 The new retirement Growing old is no more than a bad habit which a busy man has no time to form. — André Maurois

4. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 What would you like to get out of today’s program?

5. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 The transformation of retirement Agenda The five challenges Solutions to the revolution Introduction Transformation of retirement Retirement challenges Solutions Conclusion

6. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 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 Transformation of retirement Retirement challenges Solutions Conclusion Chances of a 65-year-old living to age 90

7. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 The retirement generation gap Healthier, more active lifestyles More flexibility Greater control Lifetime income Introduction Transformation of retirement Retirement challenges Solutions Conclusion

8. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 The retirement generation gap Decline of traditional retirement income sources Social Security Corporate pensions Medicare Introduction Transformation of retirement Retirement challenges Solutions Conclusion

9. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 The retirement generation gap Portfolio management structuring In the past, income management was sufficient. Now we need continued accumulation and protection of retirement assets. Introduction Transformation of retirement Retirement challenges Solutions Conclusion

10. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Greater freedom in retirement requires: Greater stability of income Control Flexibility Introduction Transformation of retirement Retirement challenges Solutions Conclusion Retirement challenges are a-changin’, too

11. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 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 Transformation of retirement Retirement challenges Solutions Conclusion Where will all your income come from? 37.6% 18.7% 3.1% 19.9% Employer benefits 1 Data source: U.S. Bureau of Labor Statistics, 5/07

12. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 The five retirement challenges Your income must last your lifetime Simulation estimates the range of 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 Transformation of retirement Retirement challenges Solutions Conclusion 2 Chances of your income lasting throughout a 25-year retirement

13. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 The five retirement challenges Maintaining your standard of living Hotel stay1976–20066.38%$0.28 Dining out1965–20064.90%$0.16 Admissions to movies, theater, concerts, and1978–20065.07%$0.32 sporting events Avg. annual$1 equals ExpenseTime periodinflation rate(2003) Introduction Transformation of retirement Retirement challenges Solutions Conclusion 3 Cost of inflation Source: U.S. Dept. of Labor Statistics, 2007 Most recent data available

14. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 The five retirement challenges Managing market volatility Introduction Transformation of retirement Retirement challenges 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%

15. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 The five retirement challenges 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 1 National Coalition on Health Care, “Facts on Health Care Costs,” 2007. 2 “Employer Health Benefits 2006 Summary of Findings,” Kaiser Family Foundation. Introduction Transformation of retirement Retirement challenges Solutions Conclusion 5

16. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 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 Transformation of retirement Retirement challenges Solutions Conclusion

17. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions Introduction Transformation of retirement Retirement challenges Solutions Conclusion A shifting income portfolio for your evolving retirement income needs Variable expenses Fixed expenses Wealth transfer Healthcare Emergency/Opportunity funds

18. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions Income strategy allocation Growth Fixed Insured Liquid Miscellaneous Introduction Transformation of retirement Retirement challenges Solutions Conclusion

19. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions Growth Greater returns; higher risk Help maintain accumulation potential Greater growth potential Tax advantages Introduction Transformation of retirement Retirement challenges Solutions Conclusion

20. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions 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 Transformation of retirement Retirement challenges Solutions Conclusion

21. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions Insured Fixed and growth orientation Insurance component with guarantee Generally cost more Tax advantages Guarantees are backed by the financial strength of The Lincoln National Life Insurance Company. Introduction Transformation of retirement Retirement challenges Solutions Conclusion

22. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions Liquid Easy and quick access to your money Lower risks and returns Traditionally used for emergency funding Introduction Transformation of retirement Retirement challenges Solutions Conclusion

23. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions Miscellaneous Provide regular income Growth and wealth potential Estate benefits Introduction Transformation of retirement Retirement challenges Solutions Conclusion

24. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions Several solutions do exist! Introduction Transformation of retirement Retirement challenges Solutions Conclusion

25. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions Changing sources of income Create diversified portfolio Flexibility in how you take income Steady payments to you from guaranteed sources of income Introduction Transformation of retirement Retirement challenges Solutions Conclusion Guarantees are backed by the financial strength of The Lincoln National Life Insurance Company. 1

26. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions Income longevity Guaranteed lifetime income streams from 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 Transformation of retirement Retirement challenges Solutions Conclusion Guarantees are backed by the financial strength of The Lincoln National Life Insurance Company. 2

27. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions Maintaining your lifestyle Use stocks or stock mutual funds Decide how to spend down assets Consider tax-advantaged investments and financial products Shift 401(k) and other tax-deferred assets to IRA Introduction Transformation of retirement Retirement challenges Solutions Conclusion 3

28. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions 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 Transformation of retirement Retirement challenges Solutions Conclusion Guarantees are backed by the financial strength of The Lincoln National Life Insurance Company. 4

29. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Finding potential solutions Containing medical costs Long-term care insurance Introduction Transformation of retirement Retirement challenges Solutions Conclusion 5

30. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 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 Transformation of retirement Retirement challenges Solutions Conclusion

31. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 Summary Retirement is being revolutionized 5 retirement challenges Solutions Introduction Transformation of retirement Retirement challenges Solutions Conclusion

32. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 What’s next? Start now Talk with your financial advisor Introduction Transformation of retirement Retirement challenges Solutions Conclusion

33. For educational and informational purposes only. © 2007 Lincoln National Corporation UBP-0047-07 LFD0704-0953 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.