How does age influence the decision between a segregated fund and an annuity?

The choice emphasizing that older investors often choose annuities for guaranteed retirement income is grounded in the financial needs and objectives typically associated with different age groups. As individuals approach retirement age, they tend to prioritize stability, risk management, and predictable income streams to support their living expenses. Annuities provide a reliable source of income, which can be especially appealing for retirees who no longer have a regular paycheck.

In contrast, younger individuals are often more focused on growth potential, as they generally have a longer investment horizon before retirement. They may prefer segregated funds, which can offer the chance for higher returns despite the associated risks. The preference for annuities among older investors is also linked to the protection they offer against market volatility and the certainty of returns, which aligns with the need for financial security during retirement.

This understanding highlights the critical relationship between age and investment preference, showing that life stage and financial goals significantly influence choices in financial products such as segregated funds and annuities.