If you've saved enough money to retire, congratulations. You're far ahead of many others. Now your challenge is to make that money last...

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If you’ve saved enough money to retire, congratulations. You’re far ahead of many others.

Now your challenge is to make that money last.

Some consumers use annuities, which are contracts sold by insurance companies, and create an income stream at a later point in time, typically at retirement, to provide steady cash flow.

But there’s a new kid in town called a managed-payout mutual fund, which is similar to annuities but definitely not the same.

These funds aim to provide regular income payments through a professionally managed, diversified portfolio.

Income from annuities can be guaranteed to last as long as you live. If you choose a “joint and survivor” feature, the annuity pays income as long as either you or your beneficiary lives.

“Payout funds are not guaranteed,” said Steve Utkus, principal of the Vanguard Center for Retirement Research. “They’re designed to help people who don’t want to annuitize to come up with some type of financial structure to spend their money.”

Payout funds also don’t have the tax advantages that annuities do. In an annuity, your money grows tax-deferred as long as you leave it there.

But payout funds are taxed like any other mutual fund. That is, each time you take money from a mutual-fund account, you’re selling shares, so you have to report a gain or loss from that sale on your income-tax return.

Because of how they’re treated taxwise, managed payout funds are best used in an Individual Retirement Account (IRA) or something similar.

As with mutual funds in general, look for a payout fund with a low expense ratio, which is a fund’s cost of doing business, expressed as a percent of its assets.

“Some are considerably over 1 percent, which I would consider expensive,” said Dan Culloton, senior analyst at Morningstar, a fund research firm. “I would treat them like a regular mutual fund and get more suspicious the further they go over 1 percent.”

Read the fund’s prospectus and learn how it invests.

For example, Fidelity Investments’ Income Replacement Funds are similar to target-date retirement funds.

They have preprogrammed asset allocations that gradually shift from stock funds to bond funds as their target dates approach.

At the beginning of each year, the payment rate increases based on a predetermined schedule and is designed so that the payments, while not guaranteed, can keep pace with inflation.

With Fidelity, when a fund reaches its target year, all of your remaining principal, including any investment gains, is returned to you, and the fund closes. Vanguard Group managed payout funds don’t eventually liquidate.