2 separate issues- 1 - how are they guaranteeing 8% return? That makes me seriously suspicious. Unless it is some weird "invest x at 35 years old, and when you turn 65 we'll give you 8% of x every year for the rest of your life." Which is VERY different than 8% return.
2 - I have a variable annuity w/ Vanguard that I will be cashing out soon so I can use that $ for downpayments on rental property, so I know a little about them. Mine was after-tax money, so I don't pay tax or fee when I get the original money out, but earnings are taxed at your income tax rate plus 10% penalty. At least on my account, there is no redemption fee to Vanguard. For me, the only good thing about this annuity is that it kept the money where I didn't spend it. But now I don't want all my savings sitting in mutual funds. I want to play with it!
Heidi