Want to learn more about how to buy an annuity in your IRA account? Use this Abaris module to find out more about the new guidelines for QLACs and how they fit into your retirement strategy. In 2014, the US Department of Treasury passed new guidelines that allowed people to buy a certain type of deferred income annuity called a Qualified Longevity Annuity Contract (QLAC). A QLAC is bought within your IRA, 401(k) or similar account and allows you to defer the required minimum distribution, which starts at age 70½ and applies to qualified accounts. Unlike a normal deferred income annuity, which has to be funded with your post-tax dollars (or generally has an income start date before age 70.5), QLACs let you purchase guaranteed income, for life, using your pre-tax dollars. This is a major step forward for securing retirement income. Before 2014 people were forced to take money out of their IRAs, meaning they had to pay an early withdrawal penalty and pay taxes before they could purchase an annuity. QLACs ensure that your savings don’t run out. QLACs also allow you to defer the required minimum distribution (RMD) payments that the IRS mandates. Usually these payments would begin at age 70½, but under a QLAC you can defer them until age 85. Note: It doesn’t mean you can defer your entire RMD, unfortunately, just the additional amount you would have been subject to if you had not purchased a QLAC. So what does all this mean for you? Let’s take Jim, a 70 year old male, as an example. If Jim saved $1,000,000 for retirement in his IRA, he comes to a fork in the road with two choices: (1) he can keep all his money in the IRA and earn an annual 4%, or (2) he can purchase a $125,000 QLAC that’ll begin paying out at age 80. This means he’ll keep $875,000 in his IRA and earn 4% annually on that amount. Initially, Jim’s total income will, in fact, be greater if he keeps the entire $1,000,000 in his IRA. Specifically, his total income, at age 70, with no QLAC would be $26,278, whereas his total income with a QLAC at this time would be slightly less, at $22,993, despite the fact that RMD taxed are lower with a QLAC. Not totally surprising, since earning 4% per year on $1,000,000 is greater than 4% per year on $875,000. But fast forward 10 years, to when Jim is 80 years old. Now his QLAC has begun paying out, so not only is he earning income from his IRA, but from his QLAC, as well. This makes a big difference when you compare his total income without and with a QLAC: $37,657 vs. $56,255, respectively. So now total income with a QLAC is higher, and RMD taxes with a QLAC are still lower! The same goes for Jim at age 90. In short: though initially total income is higher without a QLAC, once the QLAC begins paying out that changes. A QLAC means your taxes will be lower, that is the taxes on your RMD, and, hence, total income is higher.

1. THE CHANGING FACE
OF RETIREMENT
QUALIFIED LONGEVITY ANNUITY CONTRACTS (QLACs)
www.myabaris.com @myabaris

2. What is a qualified longevity annuity
contract (QLAC)?
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In 2014, the US Department of Treasury passed new guidelines that allow people to buy
annuities within their IRAs. These annuities are called QLACs.
- QLACs allow individuals to defer the required payments starting at 70 ½ for qualified funds
The QLAC finally allows Americans to buy guaranteed lifetime income with their pre-tax
retirement funds and defer the required minimum distributions up to the age of 85.
QLACs have all the same characteristics of deferred income annuities, the type Abaris sells,
but DIAs have to be funded with post-tax dollars.

3. WHY IS THIS BIG NEWS ?
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This is a major policy step towards providing Americans the path to a secure retirement.
Previously, Americans that were a part of certain retirement plans could ensure they did not
outlive their money but they had to use post-tax money.
That meant Americans had to, either
A) Take money out of their IRAs, pay an early withdrawal penalty and taxes before
funding an annuity.
B) Have enough money saved outside of their 401(k)s and IRAs to fund an annuity.
For Americans that used pretax funds to purchase annuities, distributions had to begin by
the age of 70 ½. These distributions can now be deferred up to age 85.

4. WHAT DOES THIS MEAN FOR MY RETIREMENT?
The rules state that individuals can contribute the lesser of $125,000 or 25% of your IRA balance.
That means you can now ensure your hard earned savings do not run out later in life by simply
transferring a portion of your pre-tax savings to a QLAC.
There’s also a big tax benefit from buying a QLAC in your retirement plan that we’ll discuss in the
next few slides.
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5. TAX IMPLICATIONS OF QLACs
The money saved in your IRA is subject to a Required Minimum Distribution (RMD).
The IRS mandates RMDs beginning at age 70 1/2.
- Each year the RMD is calculated based on IRS tables of your expected lifespan.
QLACs allow you to defer payments until 85, but also lower the balance
of your IRA.
- This lowers your RMDs each year and thus lowers your taxes.
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6. A QLAC EXAMPLE
Jim is a 70 year-old single male living in Pennsylvania.
He has saved $1,000,000 for retirement in his IRA.
We’ll compare the yearly income and taxable RMDs for Jim assuming:
A) He chooses to keep all his money in the IRA and earns 4% annually.
B) He funds a $125,000 QLAC that starts at 80, keeps $875,000 in his IRA and earns 4%
annually on that money.
See QLAC example notes for extended assumptions. 6

7. JIM’S INCOME & RMD TAXES AT 70
IRA BALANCE
YR. 70 RMD
YR. 70 RMD TAXES
QLAC INCOME
TOTAL INCOME
NO QLAC WITH QLAC
$1M
$825K
$36,497
$31,934
$10,219
$8,941
$26,278
$22,993
$0
$0
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At 70, Jim’s income without a QLAC is higher, but that will change as the QLAC begins payout, as we will see next

8. JIM’S INCOME & RMD TAXES AT 80
IRA BALANCE
YR. 80 RMD
YR. 80 RMD TAXES
QLAC INCOME
TOTAL INCOME
NO QLAC WITH QLAC
$981,053
$832,171
$50,858
$44,501
$14,240
$12,460
$37,657
$56,255
$0
$24,214
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At 80, Jim’s total income with a QLAC is higher compared to a retirement strategy without a QLAC

9. IRA BALANCE
YR. 90 RMD
YR. 90 RMD TAXES
QLAC INCOME
TOTAL INCOME
NO QLAC WITH QLAC
$704,130
$616,766
$61,766
$54,045
$17,294
$15,132
$44,471
$63,126
$0
$24,124
JIM’S INCOME & RMD TAXES AT 90
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By 90, Jim’s total income with a QLAC is still higher and his taxes on the RMD are lower compared to a
retirement strategy without a QLAC

10. Takeaways From Jim’s Example
At age 70, Jim funded a QLAC, that:
- Lowered his tax burden on his RMD by $4,563
At age 80, with a QLAC
- Jim’s total yearly income was $18,598 higher than if he just used his IRA
- Paid $1,780 less taxes on his RMD
By age 90, with a QLAC
- Jim’s total yearly income was $18,655 higher than if he just used his IRA
- Paid $2,162 less taxes on his RMD
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11. THE QLAC MARKETS TODAY
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As the Treasury just announced these regulations late last year, insurance
companies are hard at work creating QLAC products
As of today, three companies have announced a QLAC product
- AIG announced their product in Nov 2014
- Principal Financial announced a product in Jan 2015
- Americo announced a new QLAC product in Feb 2015
It is expected that by the second half of 2015 many more insurance companies
should be carrying these products

12. I’m thinking about buying a QLAC - WHAT SHOULD I DO?
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Abaris suggests clients wait a few months to purchase their first QLAC
- As more insurance companies enter the market, there should be more
options available for customers
However, if you’re about to retire or reach 70 ½:
- Meet with your financial advisor or talk with Abaris about purchasing a
QLAC to make sure you’re a fit
- Review the contribution amounts for QLACs with your advisor and consider
consolidating your IRA funds before purchasing the QLAC

13. QLACS EXAMPLE NOTES
This example is strictly for illustrative purposes and does not constitute
investment advice
Example assumes single male at age 70, PA resident
$125,000 purchase of AIG General Pathway DIA
IRA balance assumes 4% yearly growth rate
28% statutory tax rate on the RMD distributions
Example does not consider taxes paid on the distribution from a QLAC product
13QLAC pricing is estimated with AIG DIA product for illustrative purposes

14. DISCLAIMER
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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 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.

15. QLACS IN THE NEWS & OTHER GOOD REFERENCES
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Recent attention the QLACs have received in the news:
- New York Times, MarketWatch, Retirement Income Journal
Treasury’s Detailed Regulations:
- Regulations, Press Release
Insurance News on the QLAC;
- Principal Financial, AIG