©2013 Lincoln National CorporationFor agent or broker use only. Not for use with the public.LCN-759997-112513
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 CompanyLincoln Life & Annuity Company of New York
LCN-759997-112513
For agent or broker use only. Not for use with the public.
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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 wealthso that it passes on to the next generation.
LCN-759997-112513
For agent or broker use only. Not for use with the public.
FOCUS ON MAXIMIZING RETIREMENT DISTRIBUTIONS
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Advisors indicate that only 55% of their clients have aretirement income plan.
Source: Cogent Research, The Cogent Discovery Series: Advisor In-Retirement IncomeTM, 2013.
LCN-759997-112513
AGENDA
For agent or broker use only. Not for use with the public.
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Tax exposure of assets
Diversification of distributions
Wealth protection
LCN-759997-112513
For agent or broker use only. Not for use with the public.
TAX EXPOSURE OF ASSETS
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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.
LCN-759997-112513
For agent or broker use only. Not for use with the public.
TAX EXPOSURE OF ASSETS
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Not all assets selected in the accumulation phaseare ideal for the distribution phase.
Accumulation phase Distribution phase
Retirement
LCN-759997-112513
For agent or broker use only. Not for use with the public.
Tax-deferred
401(k)s, IRAs, etc.
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RETIREMENT SOLUTIONS
Governmentrestrictions
Municipal bonds, Roth IRAs
LCN-759997-112513
For agent or broker use only. Not for use with the public.
Tax-advantaged
Municipal bonds, Roth IRAs
Taxable
Stocks, bonds, mutual funds, etc.
$$ Taxes
RETIREMENT SOLUTIONS
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Governmentrestrictions
Tax-deferred
IRS
401(k)s, IRAs, etc.
Income tax-free
LCN-759997-112513
For agent or broker use only. Not for use with the public.
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NEW TAX INCREASES — AMERICAN TAXPAYER RELIEF ACT (ATRA)
Governmentrestrictions
Tax-deferred
TaxableTax-
advantaged
IRS
$$ TaxesIncome tax-free
401(k)s, IRAs, etc.Stocks, bonds,
mutual funds, etc.
Municipal bonds, Roth IRAs
Capitals gains +5.0%UIMCT2 (ACA) +3.8%
Top tax rate +4.6%Medicare +0.9%Personal Exemption Phaseout (PEP) & PEASE1 +10.0%
1Itemized 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. 2Unearned 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-759997-112513
For agent or broker use only. Not for use with the public.
1010
Governmentrestrictions
Tax-deferred
TaxableTax-
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-759997-112513
For agent or broker use only. Not for use with the public.
TAX EXPOSURE OF ASSETS
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What happens at retirementWhat happens at retirement
Age
59½ Age
62Age
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-deferredbucket becomes taxable
*The 10% penalty is applicable for withdrawals from qualified plan and IRA accounts before age 59 ½.
LCN-759997-112513
For agent or broker use only. Not for use with the public.
DIVERSIFICATION OF DISTRIBUTIONS
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Diversify to protect wealth with Lincoln life insurance.
Tax-deferred growth
No contribution limits
Income tax-free distributions*
No penalties for early retirement
An income tax-free legacy
Nonreportable income
*Loans and withdrawals will reduce the policy’s cash value and death benefit.
LCN-759997-112513
For agent or broker use only. Not for use with the public.
DIVERSIFICATION OF DISTRIBUTIONS
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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
62Age
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-759997-112513
For agent or broker use only. Not for use with the public.
Legacy
DIVERSIFICATION OF DISTRIBUTIONS
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Effective retirement planning is focused on distributions.
Accumulation phase
Retirement
Distribution phase
TO THE NEXT GENERATION
LCN-759997-112513
For agent or broker use only. Not for use with the public.
HOW LINCOLN CAN HELP
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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-759997-112513
For agent or broker use only. Not for use with the public.
HOW LINCOLN CAN HELP
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Take charge with wealth protection solutions for your clients.
Contact your Lincoln representative.
LCN-759997-112513
For agent or broker use only. Not for use with the public.
THANK YOU
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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 Z05Order code: LIF-TAX-PPT002
CWI130433
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