“All at the same time, we have this huge population that needs retirement income," he said. "The need for diversification is ever greater. That diversification may be the combination of an investment portfolio with a guaranteed income offering. That’s where you’re going to have to see innovation.”

Investors face three main risks when designing a retirement income strategy, said Kelli Hueler, founder and CEO of Hueler Income Solutions, an income annuity purchase system allowing individual clients access to institutionally priced annuities.

“Longevity, market risk and inflation are the biggest ones,” said Heuler. “There’s also sequence of returns risk. If you think about the people who retired in 2008 ... they experienced very positive returns in the earliest phase of their retirement that kind of got masked in the market shock. That’s the one thing I would say is the biggest risk.”

Annuities can help address market and sequence of returns risk, said Heuler, but they have not been embraced by investors due to concerns surrounding cost, complexity and liquidity.

There’s also a problem with the annuity sales process, said Heuler.

“Obviously, annuities are often misunderstood, complex and frustrating for people, but there’s also often a conflict of interest there for the people who are providing the advice,” she said. “It can take away from the AUM and other income they’re receiving for advice.”

Heuler said that one of the most glaring signs that someone has received bad advice regarding the purchase of an annuity is when they’ve been directed to annuitize most or all of their assets. Heuler Income Solutions usually sees investors annuitize 20 percent to 25 percent of their assets, and forbids the use of more then half of their assets in an annuity.

Managed payout funds are another potential retirement income solution, said Sumsion.

“If you ask people if they need help determining how much to withdraw, 73 percent say yes,” he said. “A managed payout solution helps people solve that specific problem. It’s a compromise between what the capital markets can deliver and people’s expected retirement timeline that can give people confidence that they won’t run out of money.”

Managed payout funds attempt to pay out a stable income to investors over time, but will fluctuate in times of lower interest rates.