Lincoln Urges Advisors to Proactively Address Tax Implications for Clients Using a Range of Wealth Protection Strategies
27 February 2015

RADNOR, Pa.--(BUSINESS WIRE)--According to Lincoln Financial Group, tax planning shouldn’t be a once-yearly April exercise, but rather an ongoing effort throughout the year.

From the client’s perspective, the amounts and sources of income, including investment income, along with health and family considerations—short- and longer-term—often change throughout the year. Tax rules on the federal and state level rarely remain static.

In addition, advisor success is measured by the performance of clients’ total portfolios, as well as their ability to offer clients various options to manage taxes. This is due to both the changes clients face and the lack of understanding clients have about the far-reaching impact of taxes on their investments.

“Financial advisors can help consumers understand the complexity of issues around taxes, as well as underscore that every dollar here and there can make a difference,” said Chris Price, Advanced Sales Attorney, Advanced Annuity Sales for Lincoln Financial Distributors. “A financial professional can give attention to a host of complex rules and regulations such as analysis of marginal tax rates, phase-outs for itemized deductions and personal exemptions, and develop a smart plan for diversifying retirement income streams and, thereby, significantly reducing the impact of taxes on their retirement.”

Not surprisingly, many consumers are unaware of changes to taxes on capital gains and dividends and even the effect of the 3.8 percent Medicare tax. Similarly, they may not know that income from tax-exempt investments may not be exempt in all states and is included in modified adjusted gross income (MAGI) which may have bearing on the taxes paid on Social Security or Medicaid premiums.

During a Lincoln-sponsored webcast for financial advisors titled “Help Protect Your Clients From Tax Risk,” the company addressed these issues and the importance of tax efficient strategies that use life insurance and annuities to reduce long-term tax exposure and create tax-advantaged retirement income. An astounding 87 percent of Americans do not use tax-deferred investments as a primary way to reduce their taxes, according to a Lincoln Financial Group survey, “2013 – Expense Challenges of Age 62-75 Retirees.”

“Both annuities and life insurance should be considered as part of a diversification strategy,” said Price. “Annuities offer tax-deferred growth as taxes are only paid at the time of withdrawal when typically many investors are in a lower tax bracket. For its part, life insurance distributions are tax-free and don’t affect either adjusted gross income or modified adjusted gross income. Both of these investment vehicles can be a useful component in estate planning.”

“These basic benefits of tax-deferred and tax-free investments are clear,” said Kevin Cox, Advanced Sales Consultant, Life Sales, Lincoln Financial Distributors. “But there are other advantages related to wealth transfer that should also be a consideration.”

“With annuities, compound growth is earning interest on your interest. The longer you hold onto your annuity, the greater the power of tax deferral and compounding on your assets and the greater the possibility you may leave more money to your heirs,” said Price. “Life insurance provides for an income tax-free legacy, as there are no taxes paid on a death benefit.”

Taxes are just one of the many challenges clients now face in regard to their retirement income, making wealth protection as much of a consideration as accumulation and performance. Advisors can find more information about Lincoln Financial’s wealth protection expertise by visiting

About Lincoln Financial Distributors

Lincoln Financial Distributors, Inc. (LFD), the wholesale distribution business of Lincoln Financial Group (LFG), provides expertise and access to a range of solutions that help advisors protect wealth and deliver outcomes for their clients. Lincoln’s broad portfolio includes innovative annuity, life insurance and retirement solutions that focus on addressing issues related to taxes, healthcare, longevity, inflation and market volatility. LFD comprises seasoned financial professionals who distribute Lincoln products through licensed insurance agents, registered broker-dealers, and other financial services intermediaries. Affiliates are separately responsible for their own financial and contractual obligations.

About Lincoln Financial Group

Lincoln Financial Group provides advice and solutions that help empower Americans to take charge of their financial lives with confidence and optimism. Today, more than 17 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, as well as to guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. The company had $218 billion in assets under management as of December 31, 2014. Learn more at: Find us on Facebook, Twitter (@lincolnfingroup), LinkedIn and YouTube. To sign up for email alerts, please visit our Newsroom at


This webcast was for educational and informational purposes only and not for the purpose of providing legal or tax advice. Further, Lincoln Financial Group provides the strategies and concepts herein for educational and informational purposes only. This information is not intended to be used with the public. Further, this information is not intended to constitute a complete description of all tax consequences regarding the subject matter covered and is presented with the understanding that neither Lincoln Financial Group, nor its employees, are being engaged to render legal or tax advice.

While this webcast discussed general legal or tax aspects and concepts of financial or estate planning with annuities and life insurance, it did not discuss all aspects of U.S. federal income taxation that may be relevant to individuals in light of their particular circumstances and income tax situations. Lincoln Financial Group makes no representations as to the suitability for individual clients. Interested parties should seek separate tax and legal advice before implementing a plan or strategy of the type described in this presentation. This advice should also include the application of state, local and other tax laws and the possible effects of changes in the federal or other tax laws.


Lincoln Financial Group Distribution
Eric R. Samansky, 484-583-1431