By law, an insurance company offering a variable annuity cannot directly invest in mutual funds. It invests in fund clones; the yield is never quite as good because the management expenses are higher, but the idea is the same. Thus you have "Life Strategy I" managed by an agreement between Vanguard and the insurance company, which will more or less follow the ups and downs of Vanguard Life Strategy Growth Fund. A 401K is a valuable means of saving for your retirement. You'd rather not have to go through an annuity, but especially if there is an employer match, you do well to take advantage of it. If your employer is relatively small, perhaps you could persuade him you'd rather not have the insurance costs of an annuity in your 401K and maybe you'd be heard, particularly since it is a recently selected plan administrator. Best wishes, Chris
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