Numerous surveys show the top financial concern of retirees and aging baby boomers is making sure their money lasts as long as they do. In response, insurance companies keep rolling out innovative but often highly complicated products guaranteeing lifetime income.

That gives us more choices, but more chances to go wrong -- because some decisions in this area are irrevocable or expensive to undo.

Of course, it's possible to generate lifetime income without any insurance product. Even if you don't have enough money to live off the interest (few of us do), you could make systematic withdrawals, tapping your principal as needed without depleting it.

Systematic withdrawals give you the most liquidity and control, but you risk running out of money if you withdraw too much. For a 30-year retirement, financial planners typically recommend withdrawing not much more than 4 percent of your portfolio the first year, to be able to keep up with inflation.

But just one in 10 Americans knows that, and nearly three in 10 believe they can withdraw 10 percent or more, according to a survey conducted by the research firm Mathew Greenwald and Associates for New York Life Insurance Co. At least, pre-retirees in the survey identified ``strategies for generating income in retirement" as the one area they should know more about.

Here are some strategies using insurance products. Many financial planners today recommend you consider them for part -- I emphasize part, not all -- of your retirement money.

An immediate fixed annuity. In return for your lump sum premium -- and typically giving up access to it forever -- the insurance company pays you (or you and another person, usually your spouse) a set amount every month for life. Payments are not adjusted for inflation.

An inflation-adjusted immediate annuity. The payments you receive go up with inflation or by a set amount each year, but the initial payment is lower, sometimes considerably lower.

A immediate variable annuity. Payments are still guaranteed for life but go up or down based on the performance of investments you choose. If they do well, your income can stay ahead of inflation. If they do poorly, your income will be cut.

``Longevity" insurance. In exchange for a lump-sum premium when you're younger, this type of policy pays you a fairly high income for life, but only if and when you reach a certain age, such as 85. If you die sooner, you get nothing. Still, such a policy can allow you to spend down other assets more freely.

Variable annuities with ``living" benefits. These investment/insurance products allow you to invest tax-deferred in mutual-fund-like ``sub-accounts" and, for an ongoing fee that lowers your account value, guarantee a minimum lifetime income regardless of investment performance. The fee for this guarantee is in addition to annual annuity mortality and expense charges. You may also have to pay surrender charges to get out of the contract the first few years.

Two major types of benefits are the guaranteed minimum withdrawal benefit (GMWB in industry jargon) and the guaranteed minimum income benefit (GMIB).

With the GMWB for life benefit, you (or you and your surviving spouse under newer policies) can withdraw a percentage of the amount you invest, often 5 percent, every year for life without annuitizing, that is, having to give up access to your principal. If the withdrawals deplete your account, the insurance company continues to pay you out of its own money.

If your investments do well and your account value grows, you can periodically increase the guaranteed amount you can withdraw. If you wait to start making withdrawals, some policies also increase the guaranteed withdrawal amount.

With the GMIB, you're guaranteed a minimum income in the form of immediate fixed annuity payments, usually starting no earlier than 10 years after you first invest, regardless of how your investments perform.

These are complicated products and I recommend checking with a financial professional who does not stand to gain or lose, whatever you do.

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By Humberto Cruz

Humberto Cruz is a columnist for the South Florida Sun-Sentinel

© Copyright 2006 Globe Newspaper Company.