Want to learn more about protecting your future income from inflation? This Abaris module covers the inflation rider feature of annuities. Inflation is the idea that the price levels of goods and services in the economy increase over time. This increase impacts how much you can get for your dollar, a concept known as your purchasing power. As inflation climbs higher and higher, your purchasing power dips lower and lower. How does this connect to annuities? Inflation affects interest rates, which, in turn, help determine how much your annuity will cost to purchase today. It also affects how much your monthly annuity payouts buy in goods and services. And it may even affect how fast your monthly payout increases So inflation is definitely something you care about. Inflation is more or less inevitable in the economy. While you can’t avoid it, there are ways to defend yourself from bearing the burdens of decreased purchasing power. Inflation riders protect your annuity income against the reduction in purchasing power brought on by rising economic inflation. In other words, an inflation rider, also known as a cost of living adjustment or COLA, preemptively raises your future annuity income in order to account for the inflation that occurs. A typical inflation rider has a flat annual increase, such as a 1% increase per year. The range of the annual increase levels offered varies across insurance companies, as well as individual products. Additionally, many insurance companies provide a consumer price index rider, or a CPI rider. The CPI measures changes in the price of a basket of goods and services, and demonstrates this change by showing the current price of the basket, as well as its price in the same period of the previous year. This side-by-side comparison of prices illustrates the change in your purchasing power resulting from inflation. While inflation riders are a helpful tool for protecting your purchasing power, they have a few considerations of their own. For one thing, inflation riders don’t kick in until you start receiving your annuity income, meaning that the rider won’t cover the deferral period (the time between annuity purchase and the start of annuity income payments). A smart way to approach this stipulation is to incorporate some growth into your future income needs, as to take into account the inflation that will occur over the deferral period. We can help you figure out how much this might be. Another caveat of inflation riders is that with the rider comes an associated cost. It’s important for you to make sure you understand that cost before making any decision.

1. RIDERS OVERVIEW:
THE INFLATION RIDER
www.myabaris.com @myabaris

2. WHAT IS INFLATION?
IN•FLA•TION
in’flāSH(ә)n (noun): increases in the price levels of
goods and services in the economy over time
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3. WHY SHOULD YOU CARE?
Inflation levels determine HOW MUCH YOUR ANNUITY WILL ACTUALLY BUY
Interest rates determine HOW MUCH YOUR ANNUITY COSTS TO BUY TODAY
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Inflation and the purchasing power of a
dollar move in opposite directions
WHEN INFLATION
GOES UP
PURCHASING
POWER GOES DOWN
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4. An inflation rider protects your annuity income from reductions in
purchasing power caused by increases in inflation
An inflation rider essentially increases your future income to account
for the inflation that occurs
THE INFLATION RIDER:
Known as the cost of living adjustment (COLA)
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5. 5%
4%
3%
2%
1%
0%
1995
INFLATION PERCENTAGE PER YEAR
2000 2005 2010
5 YEAR - 2.08%
AVERAGE PER YEAR
10 YEAR – 2.38%
20 YEAR – 2.38%
OVER THE LAST 20 YEARS, ANNUAL
INFLATION HAS TYPICALLY BEEN
BETWEEN 1% AND 3% AND THE
FEDERAL RESERVE TARGETS 2%
INFLATION LEVELS.
INFLATION RIDER IN CONTEXT
The options for inflation riders typically
include flat increases (for example 1%
PER YEAR). The range for these varies
greatly across product and insurance
companies
Many insurance companies also
provide a CONSUMER PRICE
INDEX (CPI) RIDER
The CPI measures changes in the
price level of a basket of goods
and services
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6. CONSIDERATIONS OF INFLATION RIDERS
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In today’s market, the inflation riders kick in once you start receiving income
They don’t cover the deferral period
This means, it can be helpful to have your future income incorporate some growth
to take inflation over the deferment period into account
Inflation riders will have a cost associated with them – be sure you understand
what that cost is

7. Abaris recommends including a CPI-U INFLATION RIDER in your Deferred
Income Annuity
USE OUR ONLINE TOOLS to see what the price of the inflation rider is or contact
us for more information
SO WHAT’S NEXT?
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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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9. 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.
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