Plan to grow your retirement income

Transcription

1 Plan to grow your retirement income with a Prime Income Optimizer TM fixed indexed annuity LINCOLN ANNUITIES 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 Client Guide Insurance products issued by: The Lincoln National Life Insurance Company For general use with the public.

2 Sowing the seeds for a more secure future Imagine your retirement as a harvest. After years of toil, you get to enjoy what you ve worked so hard to achieve. Now is the season to prepare and plan for retirement income so that you can feel confident pursuing the lifestyle you want. An important part of planning is uprooting the challenges that could keep you from reaching your retirement goals, such as: Market risk How can you avoid volatility and create the income you ll need for the years ahead? A market downturn could affect your portfolio s ability to generate sufficient income. Yet, market exposure can provide growth opportunities to help you increase your retirement savings. Does this mean you have to trade growth for safety? Tax risk What will your tax exposure be in retirement? You pay taxes on your earnings from some vehicles, such as savings accounts, bonds, CDs and mutual funds. Will taxes diminish the growth of your savings over the years? The risk of outliving your savings Will you have enough money for the years ahead? Americans are living longer these days. This means there s a good possibility you could spend 20 to 30 years in retirement. Today, one member of a couple who have reached age 65, has a 64% chance of living to age 90. Society of Actuaries, Actuaries Longevity Illustrator, org (accessed [December 19, 2016]). Inflation risk Can your retirement income keep pace with price increases for the things you ll need like gas, food and healthcare? During your career, salary increases help you keep pace with rising costs. But if you retire with a fixed income and the inflation rate rises, you may need to spend down your savings faster. Even a low inflation rate of 2% could reduce your buying power by 32% in 15 years. United States Department of Labor, CPI Inflation Calculator, Bureau of Labor Statistics, April Protecting and growing your savings Plan to help protect what you ve already accumulated from risk and grow the financial resources you ll need in retirement with a Prime Income Optimizer TM fixed indexed annuity. It can strengthen your retirement income strategy by giving you these advantages: Financial protection from market losses Tax-deferred growth to increase your savings Income that can help keep pace with inflation and last a lifetime Access to your money if you need it for unexpected expenses A death benefit for your loved ones 2 This material is provided by The Lincoln National Life Insurance Company, which issues the insurance products described in this material. This material is intended for general use with the public. The Lincoln insurer is not providing investment advice for any individual or any individual situation, and you should not look to this material for any investment advice. The Lincoln insurer, as well as certain affiliated companies, has financial interests that are served by the sale of Lincoln insurance products.

3 Designed for your retirement income needs Think of this flexible premium fixed indexed annuity as a special breed designed exclusively for Primerica clients like you, who expect more for their future. Many fixed indexed annuities will grow your savings based on market performance. But like the weather, the market is unpredictable and who knows what kind of growth your account will yield. Prime Income Optimizer takes a different approach. This product focuses on growing income and not just your savings. Your future income increases at a guaranteed rate. Market performance determines how much more income you ll build above the guaranteed rate. And at the end of your growing season, you re guaranteed payment for the rest of your life.* Wouldn t you rather feel assured that you ll have the income you need once you stop taking your last paycheck? *The Prime Income Optimizer guaranteed lifetime withdrawal benefit is included at contract issue for an annual cost of 0.95% (maximum 1.50%). The income benefit is not optional and cannot be removed. 3

4 Combining the best of safety and growth As you re nearing your retirement years, it s ideal to have financial protection for what you ve already saved and growth so that your portfolio yields sufficient income. More risk More reward But in today s interest rate environment, where can you find both safety and growth? Many Americans with traditional deposit accounts are frustrated because they re getting less than 1% returns. On the other hand, investing in the market offers greater growth potential, but it also increases your exposure to losses. What if you could have a cross between the safety you want and the growth opportunities you need? You can with Prime Income Optimizer. It offers the potential for higher returns than traditional deposit account rates and protection from market losses. Market investments Mutual funds, traditional stocks and variable annuities Prime Income Optimizer fixed indexed annuity Principal protection Growth potential tied to market performance Not invested in the market Traditional deposit accounts CDs, savings accounts, bonds, and money market accounts Less risk Less reward Capture the market s upside opportunities without exposure to downside risk With Prime Income Optimizer, even when the S&P 500 Index is down, you ll never experience a loss.* You're tied to growth Not this Data source: S&P Dow Jones Indices LLC, a part of McGraw Hill Financial, February * A fixed indexed annuity credits 0% in down years and has the potential to credit indexed interest in up years, as provided by the contract. You cannot directly invest in any index. Past performance does not guarantee future results.

5 Rooted in a strong history When it comes to your financial future, know that you re in good company. Millions of Americans like you have turned to us to help them secure retirement income, prepare for the unexpected and protect their savings. For over 100 years, we ve proven the strength of our commitment as an American financial services company. Founded on the ideals of honesty, dependability and integrity, we ve remained strong through the Great Depression and two world wars. At a time when thousands of financial institutions failed, we continued to make good on our commitments. Lincoln has long been recognized for its disciplined financial and risk management. And this is one of the many reasons why you can rely on our solutions to help you achieve your retirement goals. Americans have relied on Lincoln Financial Group for more than a century During the Great Depression, Lincoln reaches $1 billion of insurance in-force. The Philadelphia Eagles home stadium becomes Lincoln Financial Field. Expanding into new markets, Lincoln introduces its first variable annuity and first retirement plan. Lincoln Life and Annuity Company of New York is started in Syracuse. Prime Income Optimizer launches in July Today and tomorrow Abraham Lincoln s son grants permission to use his father s name and likeness for the formation of the Lincoln National Life Insurance Company. Lincoln becomes the ninth largest U.S. life insurance company and the second largest reinsurer in the world. Lincoln surpasses the milestone of $100 billion of insurance in-force. A new marketing name Lincoln Financial Group is introduced, beginning the corporation s rise as a nationally recognized financial services company. Lincoln merges with Jefferson Pilot Financial to become one of the country s largest public life insurance companies. With a proven history of strength and innovation, Lincoln is an industry leader committed to delivering strategies and products for the creation, protection and enjoyment of wealth. 5

6 Choose how you want to grow your future income When you purchase a Prime Income Optimizer TM fixed indexed annuity, you choose how to spread your money among the interest crediting accounts, which offer tax-deferred growth for your retirement income. If you want growth you can count on, there is a fixed account that provides a 1-year guaranteed rate that will never be less than 1%. The interest is credited and compounded daily. For more growth potential, consider two interest crediting strategies tied to the performance of the S&P 500 Index, and one tied to the S&P 500 Daily Risk Control 5% Index. You re in control Allocate your money in any combination of these crediting strategies. If your growth strategy changes, you can reallocate every year on your contract anniversary. You ve got protection with the Power of Zero When the Index is negative, the lowest your account will be credited is 0%. Your principal cannot go down based on your account choices. You ll never lose what you earn. You ve got the advantage of tax-deferred growth Your money grows tax-deferred. Your savings can grow faster over time because the interest you earn won't be taxed, and the dollars you would have lost to taxes earn interest. These earnings continue to compound. 1-Year Performance Triggered Account S&P 500 Index If the Index has a positive change or remains flat over the year, your account is credited a specified rate. 1-Year Volatility Controlled Point-to-Point Indexed Account S&P 500 Daily Risk Control 5% Index The value of the Index at the end of the year is compared to its value at the beginning of the year. If the percentage change is positive, your account will earn the percentage change minus a spread. Hypothetical example Hypothetical example % S&P 500 Index return Interest earned during indexed period (assumes a 3% triggered rate) 12% % S&P 500 Daily Risk Control 5% Index return Interest earned during indexed period (assumes a 2% spread) 8% 9% 7% % 3% 3% 3% 2% 0% -5% 0% % 2% -2% 0% 0% 0% Guarantees are subject to the claims-paying ability of The Lincoln National Life Insurance Company. Indexed accounts are subject to state availability. Applicable indexed interest is credited at the end of the indexed term. Amounts withdrawn (including amounts paid as death benefit) before the end of an indexed term will not receive indexed interest for that indexed term. The S&P 500 Index is a price index and does not reflect dividends paid on the underlying stocks. It is not possible to invest directly in an index. During the surrender charge period, Lincoln reserves the right not to offer any one of the indexed accounts, but will leave at least two indexed accounts available. After the surrender charge period, Lincoln reserves the right not to offer any of the indexed accounts.

7 1-Year Monthly Cap Indexed Account S&P 500 Index The percentage change of the Index is tracked and recorded each month over a one-year period. Each month the percentage change is positive, it s recorded up to a 1.5% cap. At year-end, your account is credited the positive sum. Month Hypothetical example 4/22/09 4/22/10 Actual monthly percentage change of market index Percentage change with monthly cap 1 2.4% 1.5% 2 0.7% 0.7% 3 6.8% 1.5% 4 7.5% 1.5% 5 4.5% 1.5% 6 2.0% 1.5% 7 1.2% 1.2% 8 1.1% 1.1% 9 2.3% 2.3% % 1.5% % 1.5% % 1.5% Total indexed credit percentage= 12.7% Interest rates, specified rates and caps and spreads are declared annually by The Lincoln National Life Insurance Company at its discretion. Subsequent interest rates, specified rates, caps and spreads may be higher or lower than the initial ones and may be different from those used for new contracts. Examples are based on past market index performance; however, past performance does not guarantee future results. 7

8 Harvesting income after a season of growth Prime Income Optimizer TM is designed to increase your income potential for whenever you re ready to take it by utilizing three key features: 1 2 Account value step-ups A guaranteed 5% compounding enhancement Your account value represents the real money value you can withdraw from your contract. It rises based on the growth of your crediting accounts, and it can increase or step-up your income base. Think of your income base as the fertile ground that helps grow your future income. While you can t withdraw from it, your income base determines how much retirement income you ll have. Beginning at contract issue, this continues to increase your future income for the earlier of 10 years or until you turn age A 10% nursing home enhancement You ll have added financial protection if you ever need nursing home care. Your withdrawal rate would automatically increase to 10% of your income base. 1 When you re ready to take income Your lifetime income benefit takes into consideration your age and the length of time you ve held your contract to determine your income payout. If you have at least $25,000 in your contract, you ll receive a bonus after 5 years and 10 years. Meet Maria Age 60 Maria is a landscape architect who plans to retire in 10 years. At this point in her life, she d like to increase her savings, but isn t willing to risk market losses. And because she doesn t have a pension, Maria wants to make sure she has a regular income stream for her future. Her financial representative recommends that she take a portion of her savings and purchase a $100,000 Prime Income Optimizer fixed indexed annuity. The outcome When Maria retires, at age 70, her income from a $100,000 premium will more than double. She ll receive a lifetime income stream of $903 per month. Maria also has the assurance of a financial cushion if she would ever need qualified nursing home care. 8

9 Age-based income factors Age bands Income factor: Less than 5 years 3.25% 3.75% 4.25% 5.00% 5.50% 6.00% 6.25% 6.50% 6.75% 7.00% Income factors + bonus rate 0.75% bonus 5 to 9 years 1.15% bonus 10 or more years 4.00% 4.50% 5.00% 5.75% 6.25% 6.75% 7.00% 7.25% 7.50% 7.75% 4.40% 4.90% 5.40% 6.15% 6.65% 7.15% 7.40% 7.65% 7.90% 8.15% Subtract 0.50% for joint life contracts. 5% compounding enhancement Maria s income potential grows steadily, regardless of index performance. 2 Account value step-up At age 66, Maria's income base rose to $140,710 based on account value performance. $12,763 1 $14,071 $14,775 3 $15,513 $16,289 $17,103 $11,374 10% nursing home enhancement After age 65 Maria would see a significant income increase for qualified expenses. $7,339 $8,091 $8,495 $8,920 $9,366 Lifetime benefit amount $4,250 $4,463 $4,686 $4,920 $5,166 Lifetime income factor 4.25% 5.75% 6.65% Income base Age $100,000 $105,000 $110,250 $115,763 $121,551 $127,628 $140,710 $147,746 $155,133 $162,889 $171, (at issue) Earn a bonus If Maria delays taking income withdrawals for 5 years, she ll get a 0.75% bonus Earn a bigger bonus If Maria delays taking income withdrawals for 10 years or more, she ll get a 1.15% bonus 1 In order to qualify for the nursing home enhancement, you must be 65; you cannot be in a nursing home the year prior to rider election or for five years after; you must have a minimum 90-consecutive day stay; and your account value must be greater than zero. With joint life, the first person to qualify and file would receive the enhancement. Not available in all states. If a withdrawal is taken before starting lifetime income payments, your Income Bonus Rate will be based on when this withdrawal was taken and not when the income payments start. Withdrawals taken prior to electing an income withdrawal method under the income rider benefit will impact the amount of the LBA provided with the rider. Income taxes are due upon withdrawal and if withdrawn before age 59½, an additional 10% federal tax may apply. 9

10 Start planting the seeds for your retirement income Are you retired? Yes No When do you plan to retire? What is your primary goal for your retirement? How do you feel about taking financial risks with your savings? I want growth and am willing to take losses. I do not want to lose any of my savings. How do you feel about what your savings are currently earning? I am pleased with my earnings. I wish I could earn more. Would you be interested in earning more if you could protect your principal? Yes No Not sure Do you think you ll have sufficient retirement income? Yes No Not sure What have you done so far to prepare for your retirement? What sources of retirement income will you have? Social Security benefits: $ Pension: $ Other: $ Let s schedule our next appointment. I ll run a Prime Income Optimizer TM illustration to show you how much growth and income you can enjoy in retirement. 10

11 Reap the benefits you ll need for the years ahead A lifetime stream of income Plan to enhance your future income with a Prime Income Optimizer TM fixed indexed annuity. Growth potential and protection from losses Allocate your money in your choice of account options that offer a guaranteed fixed rate or higher return potential linked to market performance. Extra guaranteed income Create even more guaranteed income the longer you wait to begin taking withdrawals. Nursing home care support Protect against future uncertainty with an optional feature that increases your income to cover qualified nursing home expenses when you re age 65 or over. Access cash if you need it Take up to 10% of your account value each contract year at no cost. There are no surrender charges or Market Value Adjustments. Any withdrawals you take prior to electing an income withdrawal method will reduce the Lifetime Benefit Amount. Income taxes are due upon withdrawal, and if you withdraw before age 59½, an additional 10% federal tax may apply. Protection for loved ones Before your contract is annuitized, there is a death benefit that allows you to pass any remaining assets to your beneficiaries. The death benefit is equal to the greater of the account value (surrender charge and Market Value Adjustment do not apply) or the guaranteed minimum values. 11

12 Primerica is not an affiliate of Lincoln Financial Group. Not a deposit Not FDIC-insured Not insured by any federal government agency Not guaranteed by any bank or savings association May go down in value 2017 Lincoln National Corporation 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. LCN POD 1/17 Z08 Order code: FA-PIO-BRC001 Important information: The S&P 500 Index and the S&P 500 Daily Risk Control 5% Index (the Index ) are products of S&P Dow Jones Indices LLC ( SPDJI ), and have been licensed for use by The Lincoln National Life Insurance Company. Standard & Poor s, S&P and S&P 500 are registered trademarks of Standard & Poor s Financial Services LLC ( S&P ); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ( Dow Jones ); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by The Lincoln National Life Insurance Company. The Lincoln National Life Insurance Company s product is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index or the S&P 500 Daily Risk Control 5% Index. Lincoln Financial Group affiliates, their distributors, and their respective employees, representatives, and/or insurance agents do not provide tax, accounting, or legal advice. Please consult an independent advisor as to any tax, accounting, or legal statements made herein. A fixed indexed annuity is intended for retirement or other long-term needs. It is intended for a person who has sufficient cash or other liquid assets for living expenses and other unexpected emergencies, such as medical expenses. A fixed indexed annuity is not a registered security or stock market investment and does not directly participate in any stock or equity investments, or index. The index used is a price index and does not reflect dividends paid on the underlying stocks. Prime Income Optimizer TM fixed indexed annuity (contract form and state variations) and the Guaranteed Lifetime Withdrawal Benefit Rider (form AE-268 and state variations) 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. Contractual obligations are subject to the claims-paying ability of The Lincoln National Life Insurance Company. Contract may be referred to as equity indexed annuity or certificate in certain states. The contract/ certificate may be subject to a Market Value Adjustment. The certificate is a group annuity certificate issued under a group annuity contract issued by The Lincoln National Life Insurance Company to a group annuity trust. The exact terms of the annuity are contained in the contracts and any attached riders, endorsements and amendments, which will control the issuing company s contractual obligations. For more information about the annuity, please also read the Client Guide, Disclosure Statement and Facts At-A-Glance, or contact your representative. Income taxes are due upon withdrawal and if withdrawn before age 59½, an additional 10% federal tax may apply. Withdrawals and surrenders may be subject to surrender charges and a Market Value Adjustment. There is no additional tax-deferral benefit for contracts purchased in an IRA or other tax-qualified plan, since these are already afforded tax-deferred status. Products and features subject to state availability. Limitations and exclusions may apply. Not available in New York. For general use with the public.