SPDA is for those whose means stretch beyond an IRA retirement plan

Troubled by the prospect of cutbacks in social security benefits, many investors are scouting for alternate ways of building up a tax-sheltered source of retirement income.

Apart from individual retirement accounts (IRAs), whose $2,000 annual contribution ceiling is rather modest for upper-bracket taxpayers, perhaps the most popular new retirement planning tool is the single premium deferred annuity (SPDA). Modeled after the traditional annuity that provides a guaranteed, fixed lifetime income, the SPDA offers investors a combination of high fixed-rate returns, tax-deferred income, and assured safety of principal.

''SPDA's are ideal for building up a nest egg without exposing one's capital to market fluctuations,'' says Robert Filderman, senior vice-president of E. F. Hutton.

While debt securities, including tax-exempt municipal bonds, may also have attractive yields, according to Mr. Filderman, ''a fixed interest rate means market risk from price fluctuations.'' With an annuity, he adds, the return of your principal is always assured, while the interest accumulates tax-free at prescribed rates.

Unlike stock dividends or interest on savings accounts, moreover, interest earned on annuities is not subject to the new 10 percent withholding tax that will go into effect July 1. That's an advantage since withholding may erode an investment's overall yield over a period of years.

Although annuities are strictly an insurance-company product, the biggest promoters of SPDAs these days are major brokerage firms such as Merrill Lynch; Smith Barney, Harris Upham; and E. F. Hutton. Of the more than $5 billion worth of SPDAs sold in 1981, over half were distributed through securities dealers. E. F. Hutton, which has more than 3,500 account executives licensed to sell insurance products, sold close to $1.5 billion in 1982 in deferred annuities, up about 25 percent from a year earlier, according to Filderman.

Quite simply, an SPDA is a contractual obligation of the insurer issuing the policy. Most plans call for a single lump-sum payment in minimum amounts ranging from $1,000 to $20,000. There are no sales charges; interest is credited immediately on 100 percent of the purchase price.

The typical buyer, brokers say, is in his or her late 40s or early 50s, fairly affluent, and willing to plunk down $20,000 to $25,000 into his account. Once the initial payment is made, the principal builds interest at fixed, but periodically revised rates.

All interest earned compounds free of federal, state, and local income taxes until the payout date, generally after retirement, when the income bracket is lower.

The longer the money is left in an annuity, of course, the more potent is the impact of tax-deferred compound interest. Assume $10,000 is set aside. Your tax bracket is 49 percent and the annuity is earning an average rate of 10 percent annually. After 15 years, the initial sum would be worth $44,500; after 20 years , $73,300. If you invested that amount in a taxable certificate of deposit or money fund, the $10,000 would only increase to $21,500 in 15 years, and $27,500 in 20 years.

The ability to defer current taxes, however, is more restricted than it once was. The 1982 tax law put an end to the policyholder's right to withdraw part or all of his principal free of taxes during the accummulation period. To limit the benefits of tax deferral only to annuities held for long-term-savings purposes, the law slaps a 5 percent tax penalty on cash withdrawals made after Dec. 31, 1982 if the annuity hasn't been held at least 10 years. The penalty doesn't apply if you have reached 591/2 years of age, or are taking the distribution in substantially equal payments over at least a 60-month period.

The new rules don't affect contracts signed before August 14, 1982, but they do apply to money put into even old contracts following that date. In addition to the tax penalty for early withdrawals, the IRS will also treat any partial withdrawals as interest income subject to ordinary income tax. Previously, investors could borrow part of their principal, while retaining a tax umbrella over their accrued interest.