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Author: peppermintpatty Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75776  
Subject: Re: 403(b) vs. 403(b)(7) Date: 1/7/2002 11:26 PM
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JimmyTheDevil asks: "What's the difference between a 403(b) and a 403(b)(7) account? Are there any huge advantages to one or the other?
Which one is the most low maintenence?"

It depends!

A 403b account is a Tax Sheltered Annuity (TSA), issued by an insurance company. It could offer a fixed interest account + many separate investment subaccounts managed by a variety of financial firms (like popular mutual fund companies). It has a guaranteed death benefit (which adds a cost) that assures the named beneficiary a payout of the greater of the fund balance or the total amount of contributions, regardless of market conditions.

A 403b(7) account is held with a mutual fund company, so your choices of investments are limited to that fund family. There is no guaranteed death benefit, so the overall fees are typically lower.

Hope that helps...

Regards, PP
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