Compare yearly expenses before choosing a plan. Ask if your employer offers no-load mutual funds you can buy directly from the mutual fund family rather than through an insurance annuity. If your employer does not offer mutual funds, ask if they can be added. You may have to do some legwork. If your only choice is a tax-sheltered annuity, look at the costs within the annuity.
Some choices are more reasonable than others.
Unless you're near retirement, avoid fixed annuities. Over time, you will do better with mutual funds that invest in the stock market. In both, there is a layer of life insurance that typically costs the investor an additional 1 percent to 1.5 percent a year, on top of the fees for the investment. Earnings on an annuity are tax-deferred until the money is removed at retirement. A tax-deferred annuity is used to invest money for the future.