The major upside of assets in a retirement account is that those assets are not "re-taxed" as they grow. As pre-tax stocks in a retirement account grow and pay dividends, the resulting assets are also pre-tax assets, and you don't have to pay taxes until you withdraw the assets. Likewise, as after-tax stocks in a retirement account grow and pay dividends, the resulting assets are also after-tax assets, and you never have to pay taxes on them.
As a result, the annual growth of a retirement account is "what it says on the tin," so to speak. What I mean by that is that if you have an investment which returns 10% per year, then the value of your account really will increase by 10% per year.
Assets in a normal brokerage account, however, do get "re-taxed." If you have some after-tax stocks in a brokerage account, and they pay a dividend, you have to pay taxes on that dividend, even though you already paid taxes on the money you used to buy the stock in the first place. Likewise, when after-tax stocks in a brokerage account gain value, that additional value is a pre-tax asset, and you will eventually have to pay taxes on that.
As a result, the annual growth of a normal brokerage account is less than "what it says on the tin." If you have an investment which returns 10% per year, then the value of your account will not actually increase by 10% per year. It might increase by something like 8% per year instead.
This is a huge difference! If you have two accounts and you put $10,000 in each one, and the first one grows at 10% per year but the second one only grows at 8% per year, then after 40 years, the first one will be worth about $453,000, whereas the second one will only be worth about $217,000.
If I'm not mistaken, I wouldn't be able to withdraw it (without a penalty) until 59.5. What if I want to retire at 40 and withdraw all of the money at that point. (Also curious how it would affect me if I only pulled 100k annually instead of all of it).
Well, even if you retire at age 40, I'm guessing you don't want to spend your entire nest egg immediately and be broke for the rest of your life. So, don't withdraw all of the money at age 40.
Instead, withdraw the money in the form of a series of substantially equal periodic payments over your life expectancy. ($100,000 a year will probably count as "substantially equal periodic payments over your life expectancy," if you have enough money in the account to sustain that much rate of withdrawal for your entire life.) If you do this according to the rules, then you won't have to pay any early withdrawal penalties even though you're younger than 59.5.