All 403(b) investments are subject to various administrative and management fees. These fees come in many forms and can take a significant bite from your retirement nest egg. So, consider the fees of your various investment options carefully.

One advantage of variable annuities is that they may carry a guaranteed death benefit that is paid if you should die prior to taking an income stream under the annuity. Even if the investments within your annuity have lost money, if you have this guarantee, the insurance company promises that when you die your beneficiaries will receive at least as much as you contributed originally; reduced for amounts taken for withdrawals and less any outstanding loans. Some may even guarantee death benefits in excess of the  amount you originally contributed.

Depending on the specific conditions of your employer’s 403(b) plan, you may be able to borrow funds from your annuity. Most variable annuities have surrender charges. They charge a fee if you withdraw your money during the early years before your retirement. Many annuities, however, allow participants to switch investment options; e.g., to move a portion of your 403(b) account balance from a stock index funding option to one that invests in growth stocks.

Many mutual funds have “loads”—either front or back-end charges that you pay when you contribute to the 403(b) plan or when you withdraw amounts from your mutual fund custodial account. These loads may be waived if your contributions are made through your plan account.

The fees for mutual funds tend to be lower than fees for variable annuities, because there is an additional charge imposed to pay the insurance company for the death benefit guarantee, the right to receive an income stream for life at guaranteed rates specified in the contract, and the guarantee that the insurance company may not increase its expenses under the annuity contract.