1. ©2009 Lincoln National Corporation LCN200906-2030986 1 You Can Fly Save in your retirement plan Chris Keyes, CFP ® Certified Financial Planner™ professional May 13, 2009

2. ©2009 Lincoln National Corporation LCN200906-2030986 2 You Can Fly Save in your retirement plan An investor should consider the investment objectives, risks, charges and expenses 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 59½ may be subject to an additional 10% federal tax penalty.

3. You can fly. Saving gives wings to your work. LCN200906-2030986 3

4. 4 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 last vacation than planning for retirement 1 43% Average length of retirement: 10, 20, or 30 years August 2020 August 2030 August 2040 Average length of vacation: 1 to 2 weeks August

5. LCN200906-2030986 5 You can fly! Saving gives wings to your work Decide to save Enroll in your plan Decide how much to save Decide where to save

6. LCN200906-2030986 6 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%

7. 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. LCN200906-2030986 7

8. 8 Bottom line: You may be retired for decades. Source: Society of Actuaries, 2008. When you’re 65, your longevity odds are: Chance of living beyond the age of... Chance of living beyond the age of... At least one person has a chance of living beyond the age of... Male8592 Female8995 Couple9297 50%25% 50%25% 50%25% Decide to save

9. LCN200906-2030986 9 Reasons to Save You save consistently You receive an immediate tax break You harness the power of tax deferral Decide to save

10. LCN200906-2030986 10 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 plan 6% 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 25 26 35 36 45 46 Retirement plan balance at age 65 $383,393 $359,354 $195,851 $182,428 $91,129 $ 83,634 Cost of waiting one year $24,039 $13,423 $7,496 Decide to save

11. LCN200906-2030986 11 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 59½ may 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 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

12. LCN200906-2030986 12 You Receive an Immediate Tax Break Credit claimed on individual’s tax return Applies to first $2,000 in contributions Credit 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

13. LCN200906-2030986 13 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 expense associated 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 or less than the original amount invested. End of year 10 $22,653 End of year 15 End of year 20 Bottom line: Tax deferral can help your money work harder for you. $33,653 $57,662 $38,315 $57,833 $91,129 Without tax deferral With tax deferral Assumptions: $200 monthly contribution 6% interest 25% tax bracket Decide to save

14. LCN200906-2030986 14 You can fly! Saving gives wings to your work Decide to save Enroll in your plan Decide how much to save Decide where to save

15. LCN200906-2030986 15 Enroll in your 403(b) Retirement plan Contributions are pre-tax Generous contribution limits Elective deferral limits for 2010 Under age 50 = $16,500 Age 50 and older = $22,000

16. LCN200906-2030986 16 Points to Remember Consolidate assets Rollovers accepted from previous employers Pre-tax only 401(k) 401(a) IRA Check with previous provider to determine if any fees apply Enroll in your plan

17. LCN200906-2030986 17 You can fly! Saving gives wings to your work Decide to save Enroll in your plan Decide how much to save Decide where to save

18. To maintain your current lifestyle, it is estimated you will need at least of your current annual income every year of your retirement! 75% Bureau of Labor Statistics: Consumer Expenditures Survey, Nov. 2008. LCN200906-2030986 18

19. LCN200906-2030986 19 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 salary for 25 years at 3% inflation. Salary illustrated is at retirement. How much should you save? Need Decide how much to save

20. LCN200906-2030986 20 Three Keys to Decide How Much to Save Challenge yourself to contribute 2% Save money you’re “spilling” every week Decide how much to save

21. LCN200906-2030986 21 Key #2 Challenge 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. 510401520253035Today Years Account Value $509,879 $382,409 $254,940 $127,470 $0 8% savings rate 6% savings rate 4% savings rate 2% savings rate Decide how much to save

22. LCN200906-2030986 22 Key #3 Spill less coffee money This is a hypothetical example and is not indicative of any product or performance and does not reflect any expense associated with investing. Taxes will be due upon distribution. It is possible to lose money by investing in securities. $10 a week for coffee or soft drinks over 30 years $15,600 $10 a week in your retirement plan over 30 years $42,000 Assuming: 6% return, compounded monthly in a tax deferred account Decide how much to save

23. LCN200906-2030986 23 Three Fundamentals of Smart Investing Outpace inflation Know your options Diversify your portfolio Decide where to save

24. LCN200906-2030986 24 Outpace Inflation Today $40,000 20 Years30 Years $72,244 $97,090 Living expenses at a 3% inflation rate Decide where to save

25. LCN200906-2030986 25 The Everyday Impact of Inflation In just 24 years, a modest 3% annual inflation rate can cut your saving’s purchasing power in half! Now 24 Years 3% annual inflation Decide where to save

26. LCN200906-2030986 26 You can fly! Saving gives wings to your work Decide to save Enroll in your plan Decide how much to save Decide where to save

27. LCN200906-2030986 27 Decide where to save Know Your Options Understand your plan’s investment options Stocks Bonds Cash/stable value options Understand asset allocation models Determine your investor profile Understand your retirement plans benefits

28. LCN200906-2030986 28 The Pyramid of Investment Risk Cash/stable value Bonds Balanced (Stocks/Bonds) Stocks More risk, higher potential return Less risk, lower potential return Decide where to save

29. LCN200906-2030986 29 The Pyramid of Investment Risk Cash/stable value Bonds Balanced (Stocks/Bonds) Stocks More risk, higher potential return Less risk, lower potential return Decide where to save

30. LCN200906-2030986 30 The Pyramid of Investment Risk Cash/stable value Bonds Balanced (Stocks/Bonds) Stocks More risk, higher potential return Less risk, lower potential return Decide where to save

31. LCN200906-2030986 31 The Pyramid of Investment Risk Cash/stable value Bonds Balanced (Stocks/Bonds) Stocks More risk, higher potential return Less risk, lower potential return Decide where to save

32. LCN200906-2030986 32 The Pyramid of Investment Risk Cash/stable value Bonds Balanced (Stocks/Bonds) Stocks More risk, higher potential return Less risk, lower potential return Decide where to save

33. LCN200906-2030986 33 Asset Allocation The way your money is diversified among the major asset classes Helps minimize investment risk Studies show it’s an effective strategy Asset allocation/diversification cannot eliminate the risk of investment losses, and there’s no assurance that assuming more risk brings better results. Cash/stable value BondsStocks Decide where to save

34. © 2009 Morningstar, Inc. All rights reserved. 3/1/2009 LCN200903-2027663 Portfolio Diversification

35. What is Asset Allocation? © 2009 Morningstar, Inc. All rights reserved. 3/1/2009 Asset allocation is the process of combining asset classes such as stocks, bonds, and cash in a portfolio in order to meet your goals. Stocks Bonds Cash

36. 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 12345678 Number of randomly selected assets in portfolio 13.0% 10.8% 9.8% 9.2% 8.9% 8.7% 8.5% 8.3%

37. Potential to Reduce Risk or Increase Return 1970–2008 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 portfolioHigher return portfolioFixed income portfolio Return:8.4% Risk:6.3% Return:9.0% Risk:7.5% Return:8.4% Risk:7.5% 15% 85% 17% 21% 27% 12% 56% 67% Stocks Bonds Cash

38. 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 1234567 Compound annual return 1.9 Stocks 50/50 portfolio Bonds 8.5% 5.8

39. Stocks and Bonds: Risk Versus Return 1970–2008 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 50% Stocks, 50% Bonds 100% Bonds Minimum risk portfolio: 25% Stocks, 75% Bonds 11121314151619171810% Risk 80% Stocks, 20% Bonds

40. More Funds Do Not Always Mean Greater Diversification Identifying 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-valueCore-valueCoreCore-growthHigh-growth Micro Small Mid Large Giant Equity portfolio A Deep-valueCore-valueCoreCore-growthHigh-growth Micro Small Mid Large Giant

41. 2007 11.6 9.9 5.5 4.7 –5.2 1994199519961997199819992000200120022003200420052006 8.1%37.623.033.428.629.821.522.817.860.720.714.026.9 3.934.517.622.820.327.35.93.81.639.218.47.816.2 3.131.76.415.913.121.0–3.63.7–13.328.710.95.715.8 1.311.65.25.34.94.7–9.1–11.9–15.71.48.54.94.8 –7.85.6–0.92.1–7.3–9.0–14.0–21.2–22.11.01.23.01.2 Asset-Class Winners and Losers 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 Highest return Lowest return Small stocks Large stocks International stocks Long-term government bonds Treasury bills 2008 25.9 1.6 –36.7 –37.0 –43.1

42. Correlation Can Help Evaluate Potential Diversification Benefits Asset-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 Small stocks Large stocks LT corporate bonds LT govt bonds IT govt bonds Treasury bills 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 1.00 0.91 0.89 0.19 1.00 0.90 0.20 1.00 0.461.00

43. Diversification in Bull and Bear Markets 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 $2,500 Bull market 2,000 1,500 1,000 500 2002 2003 2004200520072008 500 750 1,000 1,250 $1,500 Bear market $1,314 $901 $599 $1,274 Stocks 50/50 portfolio Bonds 20062007 Oct Nov $2,084 $1,653

44. 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 Jan 1973 Jan 1974 Jan 1975 Jan 1976 Nov 2007 Mar 2008 Jul 2008 Nov 2008 Stocks Diversified portfolio

45. LCN200906-2030986 45 You can fly! Saving gives wings to your work Deciding to save today means You save consistently You receive an immediate tax break You harness the power of tax deferral Enroll in your plan

46. Save, and you’ll find you can fly. 70 million Americans can’t be wrong. National Compensation Survey: Employee Benefits in Private Industry in the United States, U.S. Department of Labor, August 2008. LCN200906-2030986 46

47. ©2009 Lincoln National Corporation LCN200906-2030986 47 You can fly Save in your retirement plan