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It's not that you're missing something. It's that the lenses through which you are viewing things are distorting what you see. Or something. Your inquiry started out being about understanding the difference between a 403b and a variable annuity. Now it seems to have shifted. That's fine. As long as we acknowledge that the nature and scope of the inquiry have changed.

If you're pursuing a strategy that involves both maximum accumulation of and judicious expenditure of assets over a long time horizon you might do one something like the following. When you reach the ripe old age of 59 or so, and you're living in a substantial, comfortable home which you don't wish to leave, you may decide to refinance that home and cash out about $100,000 in equity. You would invest that sum in some configuration whereby you would be earning, say, 9.5%, with 25% of that amount being in the form of taxable gains or distributions. You would have also picked up a substantial mortgage payment, mostly interest. You would take withdrawals from your 403b in amounts equal to the interest on the mortgage. Your taxable distribution would be washed by your interest deduction. In the mean time your $100,000 is smoking along and building additional assets for your later use. My point: there will be later uses for those accumulated pre-tax investments.

The argument is often made that "I will most likely be in a higher income tax bracket once I retire". Make an assumption about how much higher. Build your spreadsheet and calculate the value of your account at some point in time when you will retire with that higher tax bracket. Remember, your spreadsheet will need to account for monthly additions. Next compute the growth of the same amount of additions, reduced by your current combined state and federal tax liabilities on that money. Factor in a column to compute the asset shrinkage imputed for capital gains and/or distributions annually. Now, here'e the tricky part. You must apply assumed rates of return on your two investment strategies. You can pound your chest and make the rate for your non-qualified portfolio high enough, and the other investment low enough, to render the comparison meaningless. Be a little honest here. Finally, "withdraw" the money from both investments systematically, say over 20 years, in your spreadsheet. Apply the appropriate tax rates to each distribution. See how it comes out. My observation over the years is that there will be uses for a little of that tax sheltereed, fully taxable, money over time.

Your question regarding the preferential aspect of a Roth is valid, but only $2,000 worth a year. Is that all you are contributing to the 403b? If not, then your decision about investing through the 403b is still open, after the first $2,000.

The no load issue is an important one. But the impact of the load loses a great deal of significance when you test its impact over a 30 or 40 year time horizon.

One additinoal question: does your 403b have loan provisions? If so you might consider using this as a source of money for funding a college education for a future child. Also, posted elsewhere is an interest discussion about borrowing against, in that discussion, a 401k account and using that money to fund other investments. It's like creating a virtual margin account, except there are no margin calls. You can't do that with your non-qualified account.
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