A Comparison of TDA and Non-TDA Investment Returns
比较了税收递延年金（TDA）与非TDA投资在积累期的回报率，发现除少数情况外，TDA投资更优。
Choosing to participate in a TDA program is a complex decision involving many criteria. This paper focuses attention on one criterion - the rate of return during the accumulation period. A TDA investment is compared to a non-TDA investment given changing assumptions about marginal tax rates during the period of contribution and at withdrawal. The analysis shows that the TDA investment dominates the non-TDA investment except in some narrowly defined cases. Making a decision to invest in a Tax Deferred Annuity (TDA), if one is eligible to do so, involves consideration of such criteria as: financial flexibility, safety of principal, and, of course, the return on the investment. This paper addresses and analyzes the last criterion, financial return.* This study follows two earlier studies that compare TDA and non-TDA investment alternatives. Todd [5] compared the two investment alternatives in order to determine the appropriate time to begin a TDA investment. After analyzing the effect of several variables including tax rates, the author concluded, '. . . even where there is a significant increase in taxable income from current levels to retirement levels, the availability of more post-tax dollars . . . make the (TDA) a wise investment for retirement income purposes, even for younger workers.7 In the worst case circumstances described in the present study, the results lead to a different conclusion than the Todd study. As this study demonstrates, one may be better off in some carefully defined cases if the TDA investment is not made. Healy [3] compares the future value of a non-TDA annuity after tax to TDA accumulations. Healy's study ignores differential tax effects between pre- and post-retirement income. In order to conduct a comparative rate of return analysis between these two investment alternatives, several simplifying assumptions are made: 1) equal