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I am trying to figure out what the difference between TIAA-CREF's "mutual funds" and their "variable annuity" accounts.
In particular, are there differences in:

1) Rules about withdrawal.

2) Taxation rates on withdrawal.

Both are in my 401K from work so they are both tax-deferred. Those are the only things I could of that might differentiate them. What am I missing?

I read a couple of other posts from other boards on variable annuities. The consensus seems to be "bad" unless maybe they are from Vanguard or TIAA-CREF. However, they seem to be comparing variable annuties against other general investing choices. I don't have the choice through work. There seem to be a lot of complaints about the generally high fees, but I have to invest either in TIAA-CREF's mutual funds or their variable annunities and in many cases the VA's fees appear lower.

I looked at the fees when trying to compare them. I was surprised to see, for example, the fees for the equity index variable annuity which tracks the Russel 3000 was .36% whereas the fees for the S&P500 index mutual fund was .44%. I'm a newbie but isn't it easier to track 500 stocks than 3000 (or at least no harder)?

Thanks [and let me know if I should post this elsewhere],

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