09 March 2011

This year, people saving for retirement through their company-sponsored retirement plan may increase their contributions by 2% without seeing much impact to their take-home pay. As part of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, signed into law on December 17, 2010, the employee portion of the Social Security tax has decreased from 6.2% to 4.2% for all of 2011. This 2% savings is substantial over the course of the year, and if invested in a retirement plan today, could boost account balances in the long run.*

"The Social Security tax relief gives employees a unique opportunity this year to increase contributions to their 401(k) plans without seeing any changes in take-home pay," said Chuck Cornelio, president, Defined Contribution Business, Lincoln Financial Group. "Employees are often cautious about increasing their contributions or even enrolling in a retirement plan because they feel that they just can’t afford it. This new tax break gives people a great opportunity to simply redirect the surplus to retirement savings before they spend it somewhere else."

The Social Security tax will return to 6.2% on January 1, 2012. Participants interested in deferring the additional 2% into their retirement plans or enrolling into a plan should contact their retirement consultant or plan administrator to explore ways to capitalize on this short-term relief. Lincoln Financial Group’s team of Retirement Consultants is prepared to work closely with plan participants to provide clear information on benefits of contribution increases.

"Lincoln is committed to strengthening its participant experience by providing ongoing guidance and solutions that help people create better financial outcomes," says Cornelio. "Our dedicated team of Retirement Consultants continues to be a valued partner to plan participants, helping them fully understand the retirement saving options available to them as they prepare for the future."

* The tax reduction applies to the first $106,800 of wages.

About Lincoln Financial Group

Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. With headquarters in the Philadelphia region, the companies of Lincoln Financial Group had assets under management of $157 billion as of December 31, 2010. Through its affiliated companies, Lincoln Financial Group offers: annuities; life, group life and disability insurance; 401(k) and 403(b) plans; savings plans; and comprehensive financial planning and advisory services. For more information, including a copy of our most recent SEC reports containing our balance sheets, please visit www.LincolnFinancial.com.


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