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Stephen Deschenes recalls what it was like when he entered the financial-services sector just over 25 years ago.

In the U.S., one in two people was covered by a defined benefit pension plan. People had great expectations for their own savings as well - with mutual funds climbing in the 1980s and 90s - and felt secure that government pensions would be a partial safety net.

That was then, this is now.

Mr. Deschenes, senior vice-president and manager of the annuities division of Sun Life Assurance Company of Canada (U.S.), considers the situation today: One in six have defined benefit pension plans, and for most mutual funds, the past 10 years have been "a relatively flat-return environment." Social security in the U.S. is at risk.

His conclusion: Today's retiree is in a unique spot. More than ever, it's up to each individual to take care of his or her own retirement needs.

"For most of them, the game has changed and their expectations have to be recalibrated," says Mr. Deschenes.

Mr. Deschenes has put out a white paper looking at retirement and how best to make sure you have enough money saved.

His first piece of advice: Don't just look at the amount of your assets, but consider what kind of income you'll require.

"To put it into context, a lot of people think $1-million is a huge amount of money to save for retirement, but if you're going to take out four per cent of that a year and live on the four per cent, if you've been living on a $100,000 income, that's a step down to a $40,000 income plus [government payments]" he says.

And lifestyle is also important, he says. In surveys conducted by his company, 80 per cent of respondents who say they plan to work until they're 67 years old attribute that to the fact that they want to earn enough money to live well.

"People have to always think of it in two ways: How much do I have to save, obviously, but can I translate that savings into an effective income to match my lifestyle," he says.

Mr. Deschenes' advice is to have diversified sources of income, and he includes annuities as the source for guaranteed income.

His three-prong strategy is as follows: 1.A single-premium immediate annuity, which would guarantee a set amount of income for life and is based on a fixed rate so there is no market risk 2.A variable annuity with a living benefit, which would guarantee a set amount of income for life and has the potential to grow income over time with up markets (although excessive or early withdrawals can impact the guarantees) 3.Mutual funds, as the most common way to get exposure to capital markets The idea isn't to make each of prongs 33 per cent of your portfolio, Mr. Deschenes says - that's a conversation you should have with your adviser to make adjustments based on the kind of income you want to have when you retire.

The portfolio's balance comes from the spectrum of investments, with mutual funds representing liquidity and market growth, but no guarantees. At the other end of the spectrum is the single-premium annuities, with certainty and no market exposure, therefore no upside when the market climbs.

"Neither one of the ends of the spectrum works well by themselves," Mr. Deschenes says. "But in combination, especially in a combination with a variable annuity with a living benefit, you can really begin to build a portfolio with the right level of guarantees, the right level of growth, and the right level of flexibility."

He uses the example of what would happen if you did have your money split equally between the three prongs. "If you did that and it was a bad market, two-thirds of your assets would be guaranteed. And if it was a really great market, two-thirds of your assets would have exposure to the market."

Mr. Deschenes acknowledges that during the boom times over the past few decades, annuities weren't even on the radar of investment experts and academics. But along with the bust - and the huge drops in investors' portfolios - came acknowledgment of the sure thing, and with it recognition of annuities.

"I think now there's a growing recognition that a lifetime guarantee is an asset class," he says.

And that means as boomers turn their attention to income during their retirement years, annuities could become a more popular choice.