Wondering why inflation is important for your retirement income? Start here if you want to learn how annuities can protect you against inflation and which kind of inflation rider to purchase. Abaris has broken down the issue in an intuitive and straightforward way. It’s hard to read, listen to, or talk about anything regarding finances without the word “inflation” coming up. In fact, a lot of people hear the word used all the time, but don’t really understand what inflation means, and how it relates to their money or retirement. So what exactly is inflation? It’s an increase in the price levels of goods and services in the economy over time. In other words, prices increase over time, and inflation is the rate at which they’re increasing. When there is inflation, your purchasing power drops, meaning that the same $100 today, for example, will be able to get you less “stuff” in the future. Over the last 20 years the inflation rate has hovered somewhere between 1% and 3%, and the federal reserve targets 2% inflation levels. How does all this relate to retirement and your annuity? In two ways. First of all, expected inflation, among other factors, influences interest rates. Interest rates determine how much your annuity will cost to purchase. Secondly, the inflation levels determine how much the payments you receive from your annuity will actually buy, meaning the purchasing power of your annuity payments. When it comes to protecting yourself from inflation there are three simple steps you can take. The first is to figure out your fixed expenses, so your grocery, housing, medical, travel, and leisure expenses, minus your pension and social security payments. Next, estimate how much those expenses will be in terms of future dollars. At Abaris, we can help you through this process. The final step is to purchase an annuity with an inflation rider tied to actual inflation levels. It’s better to get a CPI-U (consumer price index for all urban consumers) than to guess what the inflation rate will average out to be. That said, not all the insurers have CPI-U inflation-adjusted products, so make sure you’re choosing wisely. It’s hard to navigate the annuity market. There’s tons of information out there, and not all of it is true. There’s a myth that fixed annuities do not protect you against inflation. But with an inflation rider, you are in fact protected. Which brings up a second misconception: that buying an inflation rider means you don’t have to worry anymore about inflation. That’s not true either; you’re still subject to the inflation that occurs between the purchase date and the income start date. The inflation rider is merely a part of the process. It can be confusing, we get it. That’s where we come in, here to help answer any questions about how to protect yourself when you make your next annuity purchase.

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INFLATION
WHAT YOU NEED TO KNOW
WHEN BUYING YOUR ANNUITY
www.myAbaris.com @myAbaris

2. 2
IN·FLA·TION (in’flāSH(ә)n, noun): Increases in the price levels of goods
and services in the economy over time.
WHAT IS INFLATION?

3. 3
INFLATION BASICS
When there is inflation, the pur-
chasing power of a certain amount
of money (let’s say $100) goes
down. If there is deflation, the
purchasing power of the $100
would go up.
INFLATION AND PURCHASING POWER MOVE IN OPPOSITE DIRECTIONS.
WHEN INFLATION
GOES UP
PURCHASING
POWER GOES
DOWN

4. 4
WHY SHOULD YOU CARE?
1
2
Inflation levels determine HOW MUCH YOUR ANNUITY WILL
ACTUALLY BUY.
Interest rates determine HOW MUCH YOUR ANNUITY COSTS
TO BUY. Interest rates are influenced by expected inflation
(among other things).

5. 5
RECENT LEVELS OF INFLATION
5 YEAR - 2.08%
AVERAGE PER YEAR
10 YEAR – 2.38%
20 YEAR – 2.38%
5%
4%
3%
2%
1%
0%
1995
INFLATION PERCENTAGE PER YEAR
2000 2005 2010
OVER THE LAST 20 YEARS, ANNUAL INFLATION HAS TYPICALLY BEEN BETWEEN
1% AND 3% AND THE FEDERAL RESERVE TARGETS 2% INFLATION LEVELS.

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ANNUITY AND INFLATION MYTHS
Fixed annuities do not protect you against inflation.
FALSE Riders exist that do protect you!
If you buy an inflation rider, you no longer have to worry
about inflation.
FALSE It’s only one part of the process.
READ ON TO FIND OUT MORE.
MYTH 1
MYTH 2

7. 7
YOU CAN PROTECT YOURSELF
FROM INFLATION IN
1 2 3
THREE SIMPLE STEPS

8. 8
STEP1 FIGURE OUT your fixed expenses less any pension or
social security payments.
`
Groceries $ $
$
Housing $
Medicine $
Travel $
Leisure $
SUBTOTAL NET TOTAL
ADD UP THEN SUBTRACT
FOR
$$$ $
Pensions
Social Security
PER MONTHEXPENSES

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STEP2 ESTIMATE using our tools how much those expenses
will be in the future dollar terms.
MONTHLY EXPENSES
IN TODAY’S DOLLARS
MONTHLY EXPENSES IN
FUTURE DOLLAR TERMS

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STEP3 PURCHASE an annuity with an inflation rider tied to actual
inflation levels.
1% 2% 3% SOMETHING
ELSE?
OR OR OR
IT’S BETTER TO GO WITH... CPI-U
DON’T GUESS WHETHER INFLATION WILL AVERAGE…

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HOW ABARIS CAN HELP?
Contact our team if you have questions about inflation and how you
can protect yourself when making your next annuity purchase.

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END NOTES
Slide 05: Minneapolis Fed Website, based on Bureau of Labor Statistics CPIU data.
Available at:
https://www.minneapolisfed.org/community/teachingaids/cpicalculatorinformation
/consumerpriceindexandinflationrates1913
Based on fullyear data available as of September 2014.

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DISCLAIMERS
The information contained in this presentation, is provided for general informational purposes as a
convenience to Abaris Financial Inc. customers and Internet users and is based upon information
generally available to the public from sources believed to be reliable. Although we believe the
information provided herein is reliable, we have not verified this information and we do not guarantee
its accuracy, completeness, timeliness or availability. Any examples shown in this presentation are
purely hypothetical and have been included for demonstrational purposes only. This information
is subject to change without notice. This information is not a substitute for obtaining advice from
a qualified professional. Therefore, you should not rely solely upon this information in making any
decision. This information, including any prospectus information, is not and does not constitute an
offer to sell or a solicitation of an offer to buy any security, service or product.
Abaris Financial, Inc., Philadelphia PA is neither a registered broker-dealer nor a registered investment
adviser. Nothing in this presentation, including links to other material, is intended as legal or tax
advice. Abaris Financial Inc.’s Licensed Producers do not give legal or tax advice. Taxpayers should
seek advice based on their particular circumstances from an independent tax advisor.