Q I am 62. My husband is 63. We hired a respected fee-based certified financial planner to update our financial plan as we head into retirement. We have a projected secure stream of income aside from our 401(k) and may or may not need to draw down on our retirement funds ever, or at least not for five or six years.

My question concerns the planner projecting 6 to 7 percent net returns on our invested assets. This looks so high to me. They said they can get those returns because they are licensed to buy directly from funds, such as Fidelity, save fees and pass them onto us. Is this realistic?

CHERIE

A The question of what rate of return to expect on invested assets is fascinating and important. There's also no easy answer. Consider the past year. It has been hard, right? Imagine if at the beginning of 2012 I told you that Europe's slump would worsen with its neverending sovereign debt crisis, the U.S. economy would grow at a mere 2 percent or so rate, and that U.S. business and consumers would be tormented for weeks of uncertainty over the so-called fiscal cliff.

You'd laugh if I told you that stock investors would enjoy double-digit returns. Yet that's what happened. Over the past 12 months the Standard & Poor's 500 index sported a total return of 16 percent. Yet, including 2012's sizzling return, the S&P 500 managed to eke out only a 1.66 percent total return over the past five years.

Long-term history suggests that average annual returns of 6 percent to 7 percent are reasonable. However, a lot depends on how those returns are earned, most importantly how much risk is taken on with the overall portfolio. I tend to live in a lower-return investment camp when it comes to retirees, an after-inflation return on a diversified portfolio ranging from 1 percent to 4 percent.

Here's my reasoning: Financial plans and expectations based on average assumptions and average investment returns are wrong on "average." The classic example is the statistician who drowns while crossing a river that was -- on average -- only 3 feet deep. Oops. Averages can mask great variations. You're also investing for a shorter period of time than the proverbial "long term." Who knows what the economy and market will be like over the next 25 to 35 years?

When thinking about future returns you'll want to take inflation into account, too. Inflation simply means a dollar today is worth less tomorrow. So, let's say inflation runs around 2.5 percent -- a reasonable guesstimate. After subtracting inflation, your 6 to 7 percent return is really 3.5 percent or 4.5 percent. I also hope that you'll create a well-diversified portfolio with high-quality investments. The price for greater financial safety though diversification and quality is a lower overall investment return.

My last caution comes from the current debate over state and local government pensions. Most state and local government plans assume 7 to 8.5 percent earnings on investments. But in recent years finance economists have made a strong case for assuming returns of 3 to 5 percent.

The bottom line: You're in good financial shape. You've saved over the years and have secured for yourself a healthy income stream. I would focus on matching up your goals to your financial resources.

Chris Farrell is economics editor for "Marketplace Money." His e-mail is cfarrell@mpr.org.