1. Types of risk presentation Types of risk in your retirement account

2. This presentation is for educational purposes only. Neither Nationwide nor any of its representatives provide tax, financial or legal advice. Investing involves market risk, including possible loss of principal and possible fluctuations in value. The Nationwide Group Retirement Series includes unregistered group fixed and variable annuities and trust programs. The unregistered group fixed and variable annuities are issued by Nationwide Life Insurance Company. Trust programs and trust services are offered by Nationwide Trust Company, FSB, a division of Nationwide Bank. The general distributor for variable products is Nationwide Investment Services Corporation, member FINRA. Nationwide Mutual Insurance Company and Affiliated Companies, Home Office: Columbus, OH 43215-2220. Nationwide, the Nationwide N and Eagle and Nationwide is on your side are service marks of Nationwide Mutual Insurance Company. © 2015 Nationwide PNM-2606AO.5 (05/15) Not a deposit Not FDIC or NCUSIF insured Not guaranteed by the institution Not insured by any federal government agency May lose value

3. Types of risk What types of risk will I face in my retirement account?

4. Types of risk 4 Investment risk Types of risk 4 Investments may decline in value Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.

5. Types of risk 5 Market volatility is the fluctuation of the value of investments Market risk Market risk/market volatility

6. Types of risk 6 Market risk/market volatility The market continues to grow despite downturns The Standard & Poor’s (S&P) 500 Index is an unmanaged, market capitalization-weighted index of 500 widely held stocks of large-cap U.S. companies that gives a broad look at how the stock prices of those companies have performed. It doesn’t incur the fees and expenses that an actual portfolio would incur, which would reduce performance if included. You can’t invest directly in any market index. *Source for index data: Commodity Systems, Inc. as of October 2012 Past performance of an index is not an indicator of future results. Growth of $1 invested in the S&P 500 Index from January 1950 to October 2012.

7. Types of risk 7 The rising cost of goods and services cost $0.22 $0.49 $0.76 cost $3.55 $7.93 $12.45 cost $11,838 $30.748 $45,604 Year 1985 2014 2025 4 Movie ticket 2 Car 3 First class stamp 1 Inflation risk 1 https://about.usps.com/news/national-releases/2013/pr13_077.htm (accessed 5/12/2015). 2 National Association of Theater Owners, natoonline.org (2011). 3 Autoblog.com (March, 2012). 4 Assumed inflation rate of 3.5%.

8. Types of risk 8 The loss in purchasing power Erosion of purchasing power In 25 years $100,000 will be worth the equivalent of $47,761 today assuming 3% annual inflation or $29,530 assuming 5% annual inflation. $100,000 $80,000 $60,000 $40,000 $20,000 0 5 10 15 20 25 $86,261 $74,409 $64,186 $55,368 $47,761 $78,353 $61,391 $48,102 $37,689 $29,530 Source: Standardandpoors.com (2011). Inflation risk Represents a 3% annual inflation Represents a 5% annual inflation

9. Types of risk 9 Interest rate risk As interest rates decline, the value of bonds typically increases As interest rates rise, the value of bonds generally falls

10. Types of risk 10 Foreign investment risk Things to consider: Currency and exchange rates Political factors Global economics Foreign investment risk Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.

11. Types of risk 11 Domestic versus foreign investment returns Source: Standardandpoors.com (2011). Represents when the U.S. returns outperformed foreign returns Represents when foreign markets outperformed U.S. markets Foreign investment risk

12. Types of risk 12 Investor error risk Not monitoring account Procrastination Timing the market Underestimating your needs

13. 13 Types of risk Summary Points to remember Despite market downturns, the value of the market has grown Inflation risk is the risk of your money being worth less Foreign investment risk is the risk of foreign markets not performing well Investor error risks are those within your control Market risk is the fluctuation of the value of investments Interest rate risk is the potential decrease in the amount of interest earned on fixed income investments Investment risk is the risk of losing money on investments

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