©2013 Lincoln National Corporation For agent or broker use only. Not for use with the public. LCN LIFE SOLUTIONS Presenter name Presenter title Date of presentation Life strategies to help protect wealth Retirement planning for tax efficiency Products issued by: The Lincoln National Life Insurance Company Lincoln Life & Annuity Company of New York

LCN For agent or broker use only. Not for use with the public. 2 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.

LCN For agent or broker use only. Not for use with the public. FOCUS ON MAXIMIZING RETIREMENT DISTRIBUTIONS 3 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.

LCN AGENDA For agent or broker use only. Not for use with the public. 4 Tax exposure of assetsDiversification of distributionsWealth protection

LCN For agent or broker use only. Not for use with the public. TAX EXPOSURE OF ASSETS 5 A major factor in retirement income planning Source: The Wall Street Journal, MarketWatch, “10 Reasons Your Retirement Plan Won’t Cut It,” October 7, 2013.

LCN For agent or broker use only. Not for use with the public. TAX EXPOSURE OF ASSETS 6 Not all assets selected in the accumulation phase are ideal for the distribution phase. Accumulation phaseDistribution phase Retirement

LCN For agent or broker use only. Not for use with the public. Tax-deferred 401(k)s, IRAs, etc. 7 RETIREMENT SOLUTIONS Government restrictions Municipal bonds, Roth IRAs

LCN For agent or broker use only. Not for use with the public. Tax- advantaged Municipal bonds, Roth IRAs Taxable Stocks, bonds, mutual funds, etc. $$ Taxes RETIREMENT SOLUTIONS 8 Government restrictions Tax-deferred IRS 401(k)s, IRAs, etc. Income tax-free

LCN For agent or broker use only. Not for use with the public. 9 NEW TAX INCREASES — AMERICAN TAXPAYER RELIEF ACT (ATRA) Government restrictions Tax-deferred Taxable Tax- advantaged IRS $$ Taxes Income tax-free 401(k)s, IRAs, etc. Stocks, bonds, mutual funds, etc. Municipal bonds, Roth IRAs Capitals gains +5.0% UIMCT 2 (ACA) +3.8% Top tax rate +4.6% Medicare +0.9% Personal Exemption Phaseout (PEP) & PEASE % 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.

LCN For agent or broker use only. Not for use with the public. 10 Government restrictions Tax-deferred Taxable Tax- advantaged IRS Income tax-free $$ Taxes 401(k)s, IRAs, etc. Stocks, bonds, mutual funds, etc. Municipal bonds, Roth IRAs TAX EXPOSURE OF ASSETS Distributions

LCN For agent or broker use only. Not for use with the public. TAX EXPOSURE OF ASSETS 11 What happens at retirement Age 59½ Age 62 Age 65 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 Age 70½ Ordinary income tax + 10% penalty* Tax-deferred bucket becomes taxable *The 10% penalty is applicable for withdrawals from qualified plan and IRA accounts before age 59 ½.

LCN For agent or broker use only. Not for use with the public. DIVERSIFICATION OF DISTRIBUTIONS 12 Diversify to protect wealth with Lincoln life insurance. Tax-deferred growthNo contribution limits Income tax-free distributions* No penalties for early retirement An income tax-free legacyNonreportable income *Loans and withdrawals will reduce the policy’s cash value and death benefit.

LCN For agent or broker use only. Not for use with the public. DIVERSIFICATION OF DISTRIBUTIONS 13 Rick, age 45, $500K annual income, purchases a Lincoln life insurance policy. When he dies…his family has an income tax-free legacy. Age 59½ Age 62 Age 65 No impact on SS benefits No impact on Medicare Part B No RMDs Age 70½ Income tax-free distributions, no penalties No income tax

LCN For agent or broker use only. Not for use with the public. Legacy DIVERSIFICATION OF DISTRIBUTIONS 14 Effective retirement planning is focused on distributions. Accumulation phase Retirement Distribution phase TO THE NEXT GENERATION

LCN For agent or broker use only. Not for use with the public. HOW LINCOLN CAN HELP 15 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

LCN For agent or broker use only. Not for use with the public. HOW LINCOLN CAN HELP 16 Take charge with wealth protection solutions for your clients. Contact your Lincoln representative.

LCN For agent or broker use only. Not for use with the public. THANK YOU 17 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. 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