(MoneyWatch) This post continues my series on various retirement income offerings that are being introduced in 401(k) and other defined contribution retirement plans. Today we'll take a look at Income +, the retirement income service offered by Financial Engines.

Founded by Nobel Prize winner Bill Sharpe, Financial Engines is well-known as the financial advisory service that's available on the platforms of many 401(k) plan administrators. Since 1996, Financial Engines has provided online advice to 401(k) plan participants. These services help participants decide how much they should save to reach reasonable retirement savings targets and how to allocate their accounts among the investment funds offered in their 401(k) plans. In addition, participants can elect to receive professional management services, which monitor their retirement savings and progress toward retirement goals, periodically re-balance the investments in their accounts, and prepare personalized retirement plans.

In January 2011, Financial Engines introduced Income +, an extension of their professional management service. Income + isn't a product, such as an annuity or managed payout fund. It's a service that helps plan participants turn their 401(k) balances into monthly retirement income that can last for life. During your retirement, you stay invested in the funds offered by your employer's 401(k) plan, and Financial Engines helps you manage your account balances to generate a retirement paycheck.

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With its Income + service, Financial Engines can help you in the years leading up to retirement by developing an asset-allocation strategy that manages your exposure to stock market fluctuations. The goal is to prevent your retirement plans from being thrown off track due to stock market crashes just before your retirement. The services also provides estimates of your retirement income at various retirement ages to help you decide when you can retire.

When you retire, your savings are then divided into three pots. The first generates a retirement income until an advanced age, typically age 85; it's invested in fixed income funds -- either bond funds or stable value funds -- in your 401(k) plan. This pot equals roughly 65 percent of your 401(k) account when you retire.

The second pot equals about 20 percent of your account when you retire and is invested in equity funds in your 401(k) plan. The intent of this account is to provide boosts in your retirement paycheck until age 85 to help your income keep pace with inflation.

The third pot equals about 15 percent of your account when you retire and is invested to serve as a reserve you could use to purchase a lifetime annuity at age 85. The goal is to protect you if you happen to live longer than expected.

Currently, the initial annual income you'll receive if you retire at age 65 is a little less than four percent of your total account balance, not much different from the "four percent rule" that's advocated by many financial advisors.

Financial Engines charges between 0.20 percent and 0.60 percent of your accounts for their services, depending on the arrangement it has with your 401(k) plan. Its charges are roughly one-third to one-half the charges typically assessed by personal financial advisors, who charge a percent of assets under management.

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Retirement income review: Financial Engines