what is a tda

A TDA stands for Tax-Deferred Annuity Program. It is a type of retirement plan designed to complement an employers base retirement plan. It is a defined-contribution program established under Section 403(b) of the Internal Revenue Code. The TDA program is an optional investment plan open to all TRS members. Contributions and the investment return they earn can grow quickly because taxes are deferred until the member receives the funds. The TDA plan allows individuals to save for retirement through the convenience of easy payroll deduction and reduce their taxable income. Contributions to a TDA plan are usually made before taxes, which means that contributions reduce the current taxable income and the taxes currently owed. The TDA program is designed to help individuals save for their retirement, but they may withdraw some of their savings if they reach age 59½ or experience financial hardship.