Relying only on target-date mutual funds to provide lifetime income may lead to a financial setback for retirees, according to a new study by Ernst & Young L.L.P.

Retirees that depend on target-date funds, which allocate assets according to a formula tied to a specific retirement date, run the risk of outlasting their money, says Prudential Retirement, a division of Prudential Financial Inc., Newark, N.J.

The research proves retirees need products that provide guaranteed income streams for 20 to 30 years or more of retirement, Prudential claims.

The study looked at methods of providing retirement income within a 401(k) plan using a model comparing target-date funds with one of Prudential’s annuities.

The model showed that relying on target-date funds in combination with systematic withdrawal may exhaust savings one-third of the time when withdrawing at an inflation-adjusted rate of 5% of the initial balance, according to Ernst & Young. It also showed that married couples may run out of money more than half the time.

If inoculated with the appropriate guarantees, however, an annuity can assure continued income, Pru says.