IDEAS home Printed from https://ideas.repec.org/a/taf/ufajxx/v52y1996i4p62-72.html
   My bibliography  Save this article

The After-Tax Returns from Different Savings Vehicles

Author

Listed:
  • William Ghee
  • William Reichenstein

Abstract

When saving for retirement, investors' most important decision will probably be the choice of savings vehicles, that is, whether the funds are subject to the tax structure facing personal accounts, deferred annuities, or pensions. The pension tax structure has an overwhelming long-run advantage over the other two forms. A bond or stock fund held in a pension can expect to earn at least 2.5 percentage points a year more after taxes than the same fund held in a personal account. For the 1984–93 period, no bond fund could beat a bond index fund by 2.5 percentage points a year, and few stock funds could beat a stock index fund by 2.5 points a year. Thus, the choice of savings vehicles is more important to the long-run investor than the choice of bond and stock funds.

Suggested Citation

  • William Ghee & William Reichenstein, 1996. "The After-Tax Returns from Different Savings Vehicles," Financial Analysts Journal, Taylor & Francis Journals, vol. 52(4), pages 62-72, July.
    • Handle: RePEc:taf:ufajxx:v:52:y:1996:i:4:p:62-72
    DOI: 10.2469/faj.v52.n4.2012
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2469/faj.v52.n4.2012
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.2469/faj.v52.n4.2012?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ufajxx:v:52:y:1996:i:4:p:62-72. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/ufaj20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.