Little boost, big impact - Easterseals · We’ve broken planning and saving for retirement into five simple phases, or “steps.” The steps make it easier to stay on schedule and

Little boost, big impact Saving a little more today can make a big difference tomorrow.

FOR RETIREMENT Lincoln InStep® Participant Retirement Program

2061086

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

Save

Mor

e

Step it up!

*Employee Benefit Research Institute, “The 2011 Retirement Confidence Survey,” March 2011.

It all starts with a plan — a retirement plan, that is You made a smart decision when you enrolled in your retirement plan. You’re investing in your future, and you get the benefits of an immediate tax break and tax-deferred growth potential. Plus you have access to information and motivation every step of the way. But it doesn’t stop there.

Take the next stepLincoln InStep® Participant Retirement Program

We’ve broken planning and saving for retirement into five simple phases, or “steps.” The steps make it easier to stay on schedule and fit retirement planning into your busy life. When you enrolled, you took the first step. Now take the next step: Save more.

70%

Did you know 70% of American workers say they’re behind schedule in planning or saving for retirement?*

It’s a reality check for all of us. Fortunately, it only takes a little time and money to give your retirement savings the boost it needs.

Save More

1

Let’s Go!

Increase your savings to get aheadWhether you’re a bit behind or right on track toward your retirement goals, increasing your savings rate can make a big difference. Time is of the essence, so let’s get right to it. Making this decision today could have a big impact when you retire. It’s easy, and you don’t have to spend a lot of time or make big trade-offs.

In the pages that follow, you’ll see:

Why you’ll want to save more right away

What makes it easier and more affordable than you think

How to uncover new savings opportunities

2

Three reasons to save moreBecause living longer requires itYou want your savings to last throughout your retirement — in other words, your whole life. That could mean decades after you stop working. Believe it or not, your life expectancy actually increases as you age. Once you reach age 65, you and your spouse will have a 91.3% chance one of you will live to age 80 and a 52% chance one of you will live to age 90.1

Because you want to power your retirementThroughout your life, you’ve seen the effects of inflation, and you know it may continue. If your living expenses are $40,000 per year today, you’ll need about $72,244 to maintain the same lifestyle 20 years from now.2 Growing your savings helps protect your purchasing power. Consider saving as much as possible and selecting investments that can grow faster than inflation.

Because a little goes a long wayOver time, saving more can really add up — especially if you start right away. When you save through your retirement plan, rather than in your bank account, your money has growth potential, because it’s invested. Saving a little more today at an assumed growth rate of 6% per year (accounting for ups and downs) has the possibility of producing good results over time. Look at these graphs to see what we mean.

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

Today 5 10 15 20 25 30 35 40

Years

Acco

unt v

alue

$127,470

$382,409

$509,879

$254,940

8% savings rate ($62/week)*

6% savings rate ($46/week)*

4% savings rate ($31/week)*

2% savings rate ($15/week)*

Saving more adds upJust a 2% increase (which you may barely notice today) could help you boost your savings significantly by retirement age. This graph doesn’t include an employer match or catch-up contributions, both of which would increase the final savings level even more.

*These dollar amounts show how much would go into retirement savings each week. As you’ll see, due to the benefit of tax deferral, it would actually “cost” less in take-home pay.

1 Society of Actuaries, “Key Findings and Issues: Longevity — the underlying driver of retirement risk,” July 2006, www.soa.org, accessed July 2011.

2 This assumes zero investment growth and an inflation rate of 3%.

1

2

3

3

Saving more now can be more rewarding: Increase savings from 4% to 6%If you’re ready to increase your savings rate, don’t wait. In this example, a savings boost from 4% to 6% today is worth $35,000 more by retirement time, compared to waiting five years. Being proactive can be rewarding!

$382,409

$346,723

$320,056

$300,129

$285,238

$254,940No increase

Today 5 10 15 20 25 30 35 40Years

Increase to 6% now

Increase to 6% in 5 years

Increase to 6% in 10 years

Increase to 6% in 15 years

Increase to 6% in 20 years4% savings

4% savings

4% savings

4% savings

4% savings Benefit of acting now

$382,409

– 254,940

$127,469

These graphs assume a $40,000 annual salary and 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.

Changes in tax rates and tax treatment of investment earnings may impact the comparative results. You should consider your personal investment horizon and income tax bracket, both current and anticipated, when making an investment decision, as these may further impact the results of the comparison.

4

Savings you can affordSave big, little by littleThe little things you do today can make a big difference in the long term. That’s true whether you’re recycling, getting healthier, or saving more for retirement. Saving more is easier and more affordable than you may think.

1 The most you can set aside in your employer-sponsored retirement plan for 2011 is $16,500, with additional catch-up contributions of up to $5,500 if you’re age 50 or older. Tax years 2012 and beyond are subject to a cost-of-living adjustment (COLA).

ONE CENT

UN

ITED

STATES OF AM

ERICA

Stash the new money.The easiest way to start saving more is to use newfound funds. When you get a raise, bonus, tax refund, or other new money, set aside as much as possible in your retirement plan. You won’t notice the change, but your retirement account will!

Kick it up a notch. If you’re not sure where to start, you could simply save just 1% to 2% more. It won’t be a big stretch compared to what you’re already saving, but it could be just the boost you need. Remember to kick it up another notch the next time you get an opportunity to save more.

Save on the little things. If you save just $10 a week on coffee, texting, movie rentals, or other little things, you can turn that savvy saving into real savings. Increase your savings rate by the same dollar amount or by just 1% or 2%, and you’ll barely notice the difference.

Play catch-up. If you’re willing and able to contribute the highest possible amount, here’s your chance: After age 50, the IRS allows you to save up to $5,500 above the normal yearly limit to help avoid falling behind schedule as you near retirement.1 It’s called a catch-up contribution for a good reason! Another way to catch up is to work and save more by delaying your retirement just a year or two, while continuing to increase your savings rate each year.

Take the free money. If your employer offers a matching contribution, make sure your savings rate takes advantage of the full match — it’s free money! Ask your retirement representative if there’s a match for your plan and how to make the most of it.

Here are five little ways to save more:

5

The best part of saving up!Brew your own coffee and boost your savings. This graph shows how saving just $10 per week in your daily life and contributing it to your retirement plan could grow over time.

Assuming a $40,000 yearly salary, if you saved $10 per week for 40 years, you could contribute over two years’ salary to your retirement plan!

This graph assumes a $10/week contribution and a 6% annual return, compounded monthly in a tax-deferred account. This is a hypothetical example, 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.

It “costs” less with a tax breakYour retirement plan makes it easier to save more by reducing your taxable income. Because you contribute pretax dollars, your take-home pay won’t decrease as much as your savings increase. For every $1 you save in your plan, your paycheck is only reduced by about 75 cents. Better yet, your nest egg has the potential to grow tax-deferred over time, and you won’t pay taxes until you withdraw it. See how this works in the table below.

A small boost to savings for a smaller difference in take-home payGiven these assumptions, if you save 6% in your retirement plan, the full $90 would go into your savings, but your take-home pay would only decrease by $68. That means saving $90 only “costs” you $68.

Assuming a $1,500 biweekly salary ($39,000 per year)

Contribution rate 0% 2% 4% 6% 8% 10%

Take-home pay (25% tax rate) $1,125 $1,103 $1,080 $1,058 $1,035 $1,013

Retirement plan contribution $0 $30 $60 $90 $120 $150

Net difference in take-home pay

$0 $23 $45 $68 $90 $113

These estimated tax savings are based on federal income tax rates only and do not include any state or local income tax. The tax calculations do not account for any other income sources. Your actual tax savings will depend on your personal tax situation.

30 years

$42,000

20 years

$19,000

40 years

$83,000

10 years

$7,000

6

A glimpse at the big picture

$800,000

$700,000

$500,000

$200,000

$100,000

$0

$600,000

$400,000

$300,000

Today 5 10 15 20 25 30 35 40

Years

Acco

unt v

alue

increasing 2% each year up to 15%

constant 2% savings

$779,506

$127,470

Constant vs. increasing savings rateThis graph shows how increasing your savings rate every year allows greater growth potential than keeping your savings rate constant. In this case, low and steady doesn’t win the race. Gradual increases every year have a bigger impact.

This graph assumes a $40,000 annual salary and a 6% annual return in a tax-deferred account. This hypothetical example 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 investing in securities.

Increasing contributions to your retirement plan is one of the best actions you can take to grow your savings. But now, you’re thinking even bigger. What else can you do to help build your retirement assets?

Here are some tried and true actions to help you take charge and get results:

Save in your retirement plansYou’re actively participating in your employer-sponsored retirement plan, and it’s the core of a solid retirement saving strategy. You might also want to consider adding an individual retirement account (IRA) or other type of retirement investment, depending on what’s right for you.

Choose your investment strategyBeing proactive and paying attention to your retirement account can make a difference. Simply identifying your strategy, writing it down, and sticking to it may ultimately help you save more. For example, you could decide to save consistently and monitor your account regularly or whenever your circumstances change.

Increase your savings rate regularlyChallenge yourself to boost your savings whenever you can — at least once per year. As the graph below shows, this healthy routine can ensure you stay on track toward your goals and step up your progress as you move closer to retirement.

Get your advice from a financial professionalWhen you work with a financial professional, you can tackle the more challenging aspects of retirement planning. A professional will understand your situation, apply and share advanced investment knowledge, guide you through all the actions mentioned above, and more.

7

Don’t compromise. Prioritize!By now you know saving more isn’t about making big sacrifices. It’s about prioritizing. Just as you make room in your budget for life’s essentials — make room for retirement savings.

Groceries

Housing

Utilities

Vacation

Retirement

Bring your retirement plan to lifeWhen you participate in your retirement plan, big results may not happen overnight. Little by little — with a minimal effort, small savings boosts, and some guidance — you can reach for your retirement dreams.

Now you see why saving more today means keeping your retirement dream on your must-have list. It means putting more of your hard-earned money toward your well-deserved retirement. It means bringing your retirement plan to life by saving more today, so you can bring your retirement dreams to life tomorrow.

A little boost in the short term can have a big impact in the long term.

8

Save small, dream big

Make today your day to save more!Today is an important turning point in saving and planning for your retirement. When you decide to contribute more to your plan, you’re taking a positive action for yourself, your family, and your future. You can do it on your own or with our help. Knowing how easy it is, you can save more whenever the opportunity arises. Make a new commitment to increase your contribution rate at least once every year.

Take the 2% challenge!If you’re not sure where to start, challenge yourself to save just 2% more than you’re currently saving. Assuming a $40,000 yearly salary, that’s less than $15 per week, considering the power of tax deferral.

9

To increase your savings rate, simply contact your retirement plan representative, or go to your plan website or www.LincolnFinancial.com today. It’s quick and easy!

INCOME

LIFE

RETIREMENT

GROUP BENEFITS

Mutual funds and variable annuities are sold by prospectus. Investors are advised to carefully consider the investment objectives, risks, and charges and expenses of a mutual fund, and in the case of a variable annuity, the variable contract and its underlying investment options. To obtain a mutual fund or variable annuity prospectus that contains this and other information call: 800 4LINCOLN. Read the prospectus carefully before investing or sending money.

Variable annuities are long-term investment products designed particularly for retirement purposes and are subject to market fluctuation, investment risk and possible loss of principal. Variable annuities contain both investment and insurance components, and have fees and charges, including mortality and expense, administrative and advisory fees. Optional features are available for an additional charge. The annuity’s value fluctuates

with the market value of the underlying investment options, and all assets accumulate tax-deferred. Withdrawals of earnings are taxable as ordinary income and, if taken prior to age 59½, may be subject to a 10% federal tax penalty. Withdrawals will reduce the death benefit and cash surrender value. There is no additional tax-deferral benefit for an annuity contract purchased in an IRA or other tax-qualified plan.

Variable annuities 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. For all other states, variable annuities 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 backed by the claims-paying ability of the appropriate issuing company.

The mutual fund-based programs include certain services provided by Lincoln Financial Advisors Corp. (LFA), a broker/ dealer (member FINRA) and an affiliate of Lincoln Financial Group, 1300 S. Clinton St., Fort Wayne, IN 46802. Unaffiliated broker/dealers also may provide services to customers.

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

©2011 Lincoln National Corporation

Lincoln Financial Group 150 N. Radnor-Chester Road Radnor, PA 19087

www.LincolnFinancial.com Login: Employer Retirement Plans

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.

LCN1111-2061086 INT 11/11 Z02 Order code: DC-SAVE-BRC001

HELPING PEOPLE FACE THE FUTURE WITH CONFIDENCE

At Lincoln Financial Group, we’ve spent more than 100 years living up to the character of our namesake: integrity, honesty, and the belief in a better tomorrow. We provide advice and solutions to help people save for tomorrow, secure and maximize their income, protect themselves and their loved ones, and prepare for the unexpected.