1. For Continuing Education Use Only. Not for use with the general public. The transformation, challenges and solutions to the “new” retirement. Name Title Date Hello Future. SM When I’m 65

2. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Important information You should consider the investment objectives, risks, charges and expense of any investment carefully before investing. The prospectus contains this and other important information about the investment. Please request a prospectus from your advisor. Any tax information contained in this seminar is not intended or written to be used, and it may not be used by any taxpayer, for the purpose of avoiding penalties under the Internal Revenue Code that may be imposed on the taxpayer. This seminar was created to support the promotion or marketing of the transaction(s) or matter(s) addressed in the seminar. A taxpayer should be advised to seek advice based on the taxpayer's particular circumstances from an independent tax advisor.

3. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Retirement is being revolutionized

4. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. The transformation of retirement The five challenges Solutions to the revolution Agenda Introduction Transformation of retirement Retirement challenges Solutions Conclusion

5. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. The retirement generation gap Longer retirement In 1950, retirement lasted less than 3.5 years. Today, retirement is lasting 20, 30, even 40 years! 0% 20% 40% At least one spouse 60% 80% 100% Age 80859095100105 Individual Chances of a 65-year-old living to age 90 Introduction Transformation of retirement Retirement challenges Solutions Conclusion

6. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. The retirement generation gap Healthier, more active lifestyles More flexibility Greater control Lifetime income Introduction Transformation of retirement Retirement challenges Solutions Conclusion

7. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. The retirement generation gap Decline of traditional retirement income sources Social Security Corporate pensions Medicare Introduction Transformation of retirement Retirement challenges Solutions Conclusion

8. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. 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

9. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Retirement challenges are a-changin’, too Greater freedom in retirement requires Greater stability of income Control Flexibility Introduction Transformation of retirement Retirement challenges Solutions Conclusion

10. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. The five retirement challenges Changing sources of income 1 Where will all your income come from? ? ? 25 14 3 Earnings Asset income Unaccounted income for future retirees Other Introduction Transformation of retirement Retirement challenges Solutions Conclusion

11. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. The five retirement challenges Introduction Transformation of retirement Retirement challenges Solutions Conclusion Your income must last your lifetime 2 Chances of your income lasting throughout a 25-year retirement 0% 50% 25% 100% 75% % Withdrawal rate of income 100% 0% 80% 20% 60% 40% 60% 20% 80% 0% 100% 94% 74% 49% 96% 74% 43% 98% 72% 31% 98% 65% 13% 100% 42% 1% 95% 11% 0% Higher risk/returnLower risk/return Stocks Bonds 4%6%8% 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. Indices 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 if held to maturity, while returns and principal invested in stocks are not guaranteed. The above indices are unmanaged and unavailable for direct investment. Index past performance cannot guarantee future returns.

12. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. The five retirement challenges Maintaining your standard of living 3 Hotel stay1950–20046.22%$0.09 Dining out1950–20044.28%$0.11 Admissions to movies, theater, concerts, and1950–20045.05%$0.26 sporting events Cost of inflation Avg. annual$1 Equals ExpenseTime Periodinflation rate(2003) Introduction Transformation of retirement Retirement challenges Solutions Conclusion Source: U. S. Census Bureau of Labor Statistics, 3/05

13. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. The five retirement challenges Managing market volatility 4 Positive and negative years of the S&P 500 Index (1926–2004) -40 -30 -20 -10 0 10 20 30 40 50 60 70 80 Positive 70.9% Negative 29.1% Introduction Transformation of retirement Retirement challenges Solutions Conclusion

14. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. The five retirement challenges Rising healthcare costs 90% of employers are likely to increase retiree contributions to healthcare premiums.* 20% of employers are likely to terminate employee health benefits.* The number of employers offering retiree health benefits has declined 42% from 1988 to 2003.* Annual medical spending for consumers age 65+ rose 22.3% over consumers 45–55.** Annual medical spending for consumers age 75+ rose 26.1% over consumers 45–55.** Sources: *The State of Retiree Health Benefits, Henry J. Kaiser Family Foundation, 2004 **Consumer expenditure survey 2003, U.S. Bureau of Labor Statistics, 2004 Introduction Transformation of retirement Retirement challenges Solutions Conclusion 5

15. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. A time to sow, a time to reap Introduction Transformation of retirement Retirement challenges Solutions Conclusion Revolutionary income management Variable expenses – travel, leisure activities, gifts, etc. Fixed expenses – mortgage, utilities, monthly healthcare and prescription costs, and other recurring bills Wealth transfer – assets designated for your heirs Healthcare – assets cover expenses beyond routine prescription and doctors’ bills, such as those for emergency and long-term care Emergency/Opportunity funds – immediate cash for emergencies or financial opportunities

16. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Finding potential solutions Introduction Transformation of retirement Retirement challenges Solutions Conclusion A shifting income portfolio for your evolving retirement needs Variable expenses Fixed expensesWealth transfer Healthcare Emergency/Opportunity funds

17. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Finding potential solutions Income strategy allocation Growth Fixed Insured Liquid Miscellaneous Introduction Transformation of retirement Retirement challenges Solutions Conclusion

18. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Finding potential solutions Growth Greater return potential; higher risk Help maintain accumulation potential Greater growth potential Tax advantages Introduction Transformation of retirement Retirement challenges Solutions Conclusion

19. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. 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

20. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Finding potential solutions Insured Fixed and growth orientation Insurance component with protection Generally cost more Tax advantages Any payments or benefits due on the annuity are backed by the claims-paying ability of the issuing insurance company. Such payments and benefits are subject to the financial condition of the issuing insurance company. Introduction Transformation of retirement Retirement challenges Solutions Conclusion

21. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. 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

22. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Finding potential solutions Miscellaneous Provide regular income Growth and wealth transfer potential Estate benefits Introduction Transformation of retirement Retirement challenges Solutions Conclusion

23. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Finding potential solutions Several solutions do exist! Introduction Transformation of retirement Retirement challenges Solutions Conclusion

24. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Finding potential solutions Changing sources of income Create diversified portfolio Flexibility in how you take income Steady income from sources of income with protection benefits Any payments or benefits due on the annuity are backed by the claims-paying ability of the issuing insurance company. Such payments and benefits are subject to the financial condition of the issuing insurance company. 1 Introduction Transformation of retirement Retirement challenges Solutions Conclusion

25. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Finding potential solutions Income longevity Protection benefits for lifetime income streams from annuities Stable income Potential for higher returns Any payments or benefits due on the annuity are backed by the claims-paying ability of the issuing insurance company. Such payments and benefits are subject to the financial condition of the issuing insurance company. 2 Introduction Transformation of retirement Retirement challenges Solutions Conclusion

26. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Finding potential solutions Maintaining your lifestyle Use equity-oriented investments Plan how to spend down assets Consider tax-advantaged investments and financial products Shift 401(k) and other tax-deferred assets to IRA 3 Introduction Transformation of retirement Retirement challenges Solutions Conclusion

27. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Finding potential solutions Managing market volatility Protect a portion of your portfolio Design a more conservative portfolio Any payments or benefits due on the annuity are backed by the claims-paying ability of the issuing insurance company. Such payments and benefits are subject to the financial condition of the issuing insurance company. 4 Introduction Transformation of retirement Retirement challenges Solutions Conclusion

28. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Finding potential solutions Containing medical costs Long-term care insurance 5 Introduction Transformation of retirement Retirement challenges Solutions Conclusion

29. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. 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

30. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. Summary Retirement is being revolutionized 5 retirement challenges Solutions Introduction Transformation of retirement Retirement challenges Solutions Conclusion

31. © 2005 Lincoln Financial Distributors (LFD0504-0573) For Continuing Education Use Only. Not for use with the public. What’s next? Start planning now Talk to your financial advisor Introduction Transformation of retirement Retirement challenges Solutions Conclusion