©2009 Lincoln National Corporation LCN200906-2030986 1 You Can Fly Save in your retirement plan Chris Keyes, CFP ® Certified Financial Planner™ professional

©2009 Lincoln National Corporation

LCN200906-20309861

You Can FlySave in your retirement plan

Chris Keyes, CFP®

Certified Financial Planner™ professional

May 13, 2009


LCN200906-20309862

You Can FlySave in your retirement plan

An investor should consider the investment objectives, risks, charges andexpenses of an investment company carefully before investing. Please obtain a prospectus which includes this and other information by calling 800-234-3500 or by visiting www.LincolnFinancial.com. Read it carefully before investing or sending money.

This information is taken from sources deemed reliable, but it is not meant to take the place of your plan document. Refer to your plan document for complete details.

Taxes will be due at the time of distribution; withdrawals prior to age 59½may be subject to an additional 10% federal tax penalty.

You can fly.

Saving giveswings toyour work.

LCN200906-20309863

LCN200906-20309864

1) AARP Financial Inc, October 2008

Put Your Future First

Bottom line: Devote more time to planning your future.

people who spent more time planning their lastvacation than planning for retirement1

43%

Average length of retirement:Average length of retirement:10, 20, or 30 years10, 20, or 30 years

August 2020 August 2030August 2040

Average length of vacation:Average length of vacation:1 to 2 weeks1 to 2 weeks

August

LCN200906-20309865

You can fly!Saving gives wings to your work

Decide to saveEnroll in your planDecide how much to saveDecide where to save

LCN200906-20309866

Decide to save

Bottom line: People want financial security.

What does financial security mean?

Source: American Savings Education Council and AARP, March 2008

The American Savings Education Council and AARP posed this question to a number of individuals from both Generations X and Y, and their definitions (multiple answers allowed) included:

Being able to make ends meet and not living paycheck-to-paycheck

Having enough money left over to save for emergencies or a rainy day

Being able to live comfortably

Not having to worry about one’s finances

Being able to weather hard times and deal with the unexpected

Being able to save for retirement, afford retirement, or maintain one’s lifestyle in retirement

Being able to provide for one’s family

Being able to have time for leisure, entertainment, or fun

22%

16%

13%

6%

19%

15%

9%

5%

AARP asked: “What do you value most in retirement?”

Nine out of 10 answered:“Being independent.”

“Older Workers on the Move”, AARP Public Policy Institute. May 2009.

LCN200906-20309867

LCN200906-20309868

Bottom line: You may be retired for decades.

Source: Society of Actuaries, 2008.

When you’re 65,your longevity odds are:

Chance of livingbeyond the age of...

Chance of livingbeyond the age of...

At least one personhas a chance of livingbeyond the age of...

Male 85 92

Female 89 95

Couple 92 97

50% 25%

50% 25%

50% 25%

Decide to save

LCN200906-20309869

Reasons to Save

You save consistently You receive an immediate tax breakYou harness the power of tax deferral

Decide to save

LCN200906-203098610

You Save Consistently

Bottom line: The sooner you start saving, the better.Don’t let another payday fly by!

Assumptions: $200 a month saved in retirement plan6% annual rate of return

This is a hypothetical illustration and is not indicative of any product or performance and does not reflect any taxes due upon distribution. Investment options are subject to market risk.

Age

2526

3536

4546

Retirementplan balance

at age 65

$383,393$359,354

$195,851$182,428

$91,129$ 83,634

Cost of waitingone year

$24,039

$13,423

$7,496

Decide to save

LCN200906-203098611

You Receive an Immediate Tax Break

Bottom line: You may be retired for decades.

This is a hypothetical example. Taxes on retirement plan assets will be due upon distribution and if taken before age 59½may be subject to an additional 10% federal tax penalty.

Contribution Rate

Take-home pay (25% tax rate)

Retirement plan contribution

Net difference in take-home pay

0%

$1,125

$0

$0

2%

$1,103

$30

$23

4%

$1,089

$60

$45

6%

$1,058

$90

$68

8%

$1,035

$120

$90

10%

$1,013

$150

$113

Assuming a $1,500 biweekly salary:

Decide to save

LCN200906-203098612

You Receive an Immediate Tax Break

Credit claimed on individual’s tax returnApplies to first $2,000 in contributionsCredit based on AGI schedule

These are some but not all of the provisions of the Saver’s Credit. This information is provided for educational purposes only and is not considered legal or tax advice. Consult an accountant or tax advisor before you claim the credit.

Credit

50%

20%

10%

Individual

$0 - $16,500

$16,501 - $18,000

$18,001 - $27,750

Joint

$0 - $33,000

$33,001 - $36,000

$36,001 - $55,500

Saver’s Credit limits for 2009 tax year

Decide to save

LCN200906-203098613

You Harness the Power of Tax Deferral

This is a hypothetical example. It is not indicative of any product or performance and does not reflect any expenseassociated with investing. Taxes will be due upon distribution of the tax deferred amount, and if shown, results would be lower.Actual investment results will fluctuate with market conditions, so that the amount withdrawn may be worth more orless than the original amount invested.

End ofyear 10

$22,653

End ofyear 15

End ofyear 20

Bottom line: Tax deferral can help yourmoney work harder for you.

$33,653

$57,662

$38,315

$57,833

$91,129

Without tax deferral

With tax deferral

Assumptions: $200 monthly contribution6% interest25% tax bracket

Decide to save

LCN200906-203098614



LCN200906-203098615

Enroll in your 403(b) Retirement plan

Contributions are pre-taxGenerous contribution limits

Elective deferral limits for 2010Under age 50 = $16,500Age 50 and older = $22,000

LCN200906-203098616

Points to RememberConsolidate assets

Rollovers accepted from previous employersPre-tax only

401(k)401(a)IRA

Check with previous provider to determineif any fees apply

Enroll in your plan

LCN200906-203098617



To maintain your current lifestyle,it is estimated you will need at least

of your current annual incomeevery year of your retirement!

75%

Bureau of Labor Statistics: Consumer Expenditures Survey, Nov. 2008.

LCN200906-203098618

LCN200906-203098619

$1,230,500

$957,056

$683,611

This is a hypothetical example for planning purposes only. Note: Does not include other sources of retirement savings/income. Does not factor any interest paid on retirement savings.

$25,000 salary

$35,000 salary

$45,000 salary

Assuming:75% of annual salaryfor 25 years at 3% inflation.Salary illustrated is at retirement.

How much should you save?

Need

Need

Need

Decide how much to save

LCN200906-203098620

Three Keys to Decide How Much to Save

Challenge yourself to contribute 2%Save money you’re “spilling” every week


LCN200906-203098621

Key #2Challenge yourself to contribute 2%

Bottom line: A little is good, a little more is better.Saving more lifts you higher

These graphs assume a $40,000 annual salary, a 6% annual return in a tax deferred account.These hypothetical examples are not indicative of any product or performance and do not reflect any expense associated with investing. Taxes will be due upon distribution. It is possible to lose money investing in securities.

5 10 4015 20 25 30 35Today

Years

Account Value

$509,879

$382,409

$254,940

$127,470$0

8% savings rate

6% savings rate

4% savings rate

2% savings rate


LCN200906-203098622

Key #3Spill less coffee money

This is a hypothetical example and is not indicative of any product or performance and does not reflect any expenseassociated with investing. Taxes will be due upon distribution. It is possible to lose money by investing in securities.

$10 a week for coffeeor soft drinksover 30 years

$15,600

$10 a week inyour retirement plan

over 30 years

$42,000

Assuming:6% return, compounded monthly in a tax deferred account


LCN200906-203098623

Three Fundamentals of Smart Investing

Outpace inflationKnow your optionsDiversify your portfolio

Decide where to save

LCN200906-203098624

Outpace Inflation

Today

$40,000

20 Years 30 Years

$72,244

$97,090

Living expenses at a 3% inflation rate


LCN200906-203098625

The Everyday Impact of Inflation

In just 24 years, a modest 3% annual inflation ratecan cut your saving’s purchasing power in half!

Now 24 Years

3% annualinflation


LCN200906-203098626



LCN200906-203098627


Know Your Options

Understand your plan’s investment optionsStocksBondsCash/stable value options

Understand asset allocation modelsDetermine your investor profileUnderstand your retirement plans benefits

LCN200906-203098628

The Pyramid of Investment Risk

Cash/stable value

Bonds

Balanced(Stocks/Bonds)

Stocks

Mor

e ris

k, h

ighe

r pot

entia

l ret

urn

Less risk, lower potential return


LCN200906-203098629


Cash/stable value

Bonds


Stocks

Mor

e ris

k, h

ighe

r pot

entia

l ret

urn



LCN200906-203098630


Cash/stable value

Bonds


Stocks

Mor

e ris

k, h

ighe

r pot

entia

l ret

urn



LCN200906-203098631


Cash/stable value

Bonds


Stocks

Mor

e ris

k, h

ighe

r pot

entia

l ret

urn



LCN200906-203098632


Cash/stable value

Bonds


Stocks

Mor

e ris

k, h

ighe

r pot

entia

l ret

urn



LCN200906-203098633

Asset Allocation

The way your money is diversifiedamong the major asset classesHelps minimize investment riskStudies show it’s an effective strategy

Asset allocation/diversification cannot eliminate the risk of investment losses, and there’s no assurancethat assuming more risk brings better results.

Cash/stable value

BondsStocks


© 2009 Morningstar, Inc. All rights reserved. 3/1/2009

LCN200903-2027663

Portfolio Diversification

What is Asset Allocation?

© 2009 Morningstar, Inc. All rights reserved. 3/1/2009

Asset allocation is theprocess of combining assetclasses such as stocks,bonds, and cash in aportfolio in orderto meet your goals. Stocks Bonds

Cash

Reduction of Portfolio Risk

Past performance is no guarantee of future results. Risk is measured by standard deviation. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2009 Morningstar, Inc. All rights reserved. 3/1/2009

0

2

4

6

8

10

12

14% Risk

1 2 3 4 5 6 7 8

Number of randomly selected assets in portfolio

13.0%

10.8%

9.8%

9.2%8.9%

8.7% 8.5%8.3%

Potential to Reduce Risk or Increase Return1970–2008

Past performance is no guarantee of future results. Risk and return are measured by standard deviation and compound annual return, respectively. They are based on annual data over the period 1970–2008. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2009 Morningstar, Inc. All rights reserved. 3/1/2009

Lower risk portfolio Higher return portfolioFixed income portfolio

Return: 8.4%Risk: 6.3%



15%

85%

17%21%

27%

12%

56% 67%

• Stocks• Bonds• Cash

The Case for Diversifying

Past performance is no guarantee of future results. Time period illustrated is from 1956–1962. This time period was chosen as a dramatic illustration of stock and bond return behavior and how their often opposite movements reduced portfolio volatility. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2009 Morningstar, Inc. All rights reserved. 3/1/2009

50% Return

40

30

20

10

0

–10

–20

Year 1 2 3 4 5 6 7

Compound annual return

1.9

• Stocks

• 50/50 portfolio

• Bonds

8.5%

5.8

Stocks and Bonds: Risk Versus Return1970–2008

Past performance is no guarantee of future results. Risk and return are measured by standard deviation and arithmetic mean, respectively. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2009 Morningstar, Inc. All rights reserved. 3/1/2009

12% Return

11

10

9

Maximum risk portfolio:100% Stocks

60% Stocks, 40% Bonds


100% Bonds

Minimum risk portfolio:25% Stocks, 75% Bonds

11 12 13 14 15 16 1917 1810% Risk


More Funds Do Not Always Mean Greater DiversificationIdentifying potential security overlap

Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2009 Morningstar, Inc. All rights reserved. 3/1/2009

Equity portfolio B

Deep-value Core-value Core Core-growth High-growth

Mic

roS

ma

llM

idL

arg

eG

ian

t

Equity portfolio A

Deep-value Core-value Core Core-growth High-growth

Mic

roS

ma

llM

idL

arg

eG

ian

t

2007

11.6

9.9

5.5

4.7

–5.2

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

8.1% 37.6 23.0 33.4 28.6 29.8 21.5 22.8 17.8 60.7 20.7 14.0 26.9

3.9 34.5 17.6 22.8 20.3 27.3 5.9 3.8 1.6 39.2 18.4 7.8 16.2

3.1 31.7 6.4 15.9 13.1 21.0 –3.6 3.7 –13.3 28.7 10.9 5.7 15.8

1.3 11.6 5.2 5.3 4.9 4.7 –9.1 –11.9 –15.7 1.4 8.5 4.9 4.8

–7.8 5.6 –0.9 2.1 –7.3 –9.0 –14.0 –21.2 –22.1 1.0 1.2 3.0 1.2

Asset-Class Winners and Losers


Highestreturn

Lowestreturn

• Small stocks • Large stocks • International stocks • Long-term government bonds • Treasury bills

2008

25.9

1.6

–36.7

–37.0

–43.1

Correlation Can Help Evaluate Potential Diversification BenefitsAsset-class correlation 1926–2008

Past performance is no guarantee of future results. Correlation ranges from –1 to 1, with –1 indicating that the returns move perfectly opposite to one another, 0 indicating no relationship, and 1 indicating that the asset classes react exactly the same. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2009 Morningstar, Inc. All rights reserved. 3/1/2009

Smallstocks

Largestocks

LT corporatebonds

LT govtbonds

IT govtbonds

Treasurybills

Small stocks

Large stocks

LT corporate bonds

LT govt bonds

IT govt bonds

Treasury bills

1.00

0.80

0.07

–0.07

–0.10

–0.09

1.00

0.18

0.05

0.00

0.00

1.00

0.91

0.89

0.19

1.00

0.90

0.20

1.00

0.46 1.00

Diversification in Bull and Bear Markets


$2,500

Bull market

2,000

1,500

1,000

500

2002 2003 2004 2005 2007 2008

500

750

1,000

1,250

$1,500

Bear market

$1,314

$901

$599

$1,274

• Stocks

• 50/50 portfolio

• Bonds

2006 2007Oct Oct Oct Oct Oct Oct Nov Nov

$2,084

$1,653

Diversified Portfolios and Bear Markets

Past performance is no guarantee of future results. Diversified portfolio: 35% stocks, 40% bonds, 25% Treasury bills. Hypothetical value of $1,000 invested at the beginning of January 1973 and Nov 2007, respectively. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2009 Morningstar, Inc. All rights reserved. 3/1/2009

Mid-1970s recession (Jan 1973–Jun 1976) 2007 bear market (Nov 2007–Dec 2008)

$1,150

$1,014

$950

$599

$1,250

1,000

750

500 Jan1973

Jan1974

Jan1975

Jan1976

Nov 2007

Mar 2008

Jul2008

Nov 2008

• Stocks• Diversified portfolio

LCN200906-203098645


Deciding to save today meansYou save consistently You receive an immediate tax breakYou harness the power of tax deferral

Enroll in your plan

Save, and you’ll find you can fly.

70 million Americans can’t be wrong.

National Compensation Survey: Employee Benefits inPrivate Industry in the United States,U.S. Department of Labor,August 2008.

LCN200906-203098646


LCN200906-203098647

You can flySave in your retirement plan

Documents

©2009 Lincoln National Corporation LCN200906-2030986 1 You Can Fly Save in your retirement plan Chris Keyes, CFP ® Certified Financial Planner™ professional