An insurance company has released a paper that looks at the effects of tax deferral on retirement savings.

Tax deferral is key to accumulating extra savings and generating more retirement income, according to Matthew Grove, a senior vice president at Jefferson National Life Insurance Company, New York, a unit of Inviva Inc., Louisville, Ky., and Ira Weiss, an accounting professor at the University of Chicago.

Jefferson National, Dallas, a unit of Inviva Inc., Louisville, Ky., sponsored the analysis.

Grove and Weiss examine the performance of tax-deferred and taxable accounts over varying periods of time.

The authors of the analysis conclude that using a low-cost, no-load, tax-deferred investment such as a flat-insurance fee variable annuity could boost retirement income significantly for investors who have maxed out contributions to individual retirement accounts, 401(k)s and other tax-advantaged vehicles.

A no-load, flat-insurance fee VA contract can outperform a taxable account, even when capital-gains taxes are at an all-time low, Grove and Weiss write.

Asset-based VA fees can negate the benefit of tax deferral, the authors contend.