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Editors' pick: Originally published Oct. 28.

Having high expectations typically may be good, but investors may be expecting too much when it comes to the


— leaving their retirement savings in danger.

Investors are expecting returns of 8.5% on top of inflation when they invest in the market, according to a study by Natixis Global Asset Management. That expected rate of return is a full 44% higher than advisors say is realistic in the market.

"Expecting 8.5% in this environment is probably not a good idea," said Oscar Vives Ortiz, a CPA financial planner with First Home Investment Services in the Tampa Bay/St. Petersburg, Fla. area. "If people have this expectation, they may not be looking at the data closely or their advisors aren't doing a good job of bringing expectations down."

Ortiz noted a 60/40 diversified portfolio with international exposure yielded 13.19% compounded annual return from 1985 to 2000. However, that same portfolio returned approximately 7% per year from 2000 to 2015. These returns are total returns, not returns after inflation, he added.

"If you look at stock valuations during both periods as defined by the Shiller P/E ratio, stocks were much cheaper in 1985 as compared to 2000 and 2008," he said, adding during both periods interest rates have been decreasing, leading to a bull market on bonds that is probably not realistic going forward.

"If you mix higher stock valuations with low interest rates, you'd be lucky to earn 8.5% total return going forward, let alone after inflation," Ortiz said.

Sameer Samana, global quantitative strategist for Wells Fargo Investment Institute, said their own investors survey corroborates these too-high expectations on the part of some investors — with 18% in the Wells Fargo/Gallup survey expecting to earn more than 10% on their investments this year.

The results are especially interesting when it is also noted that on average respondents had only 35% of their assets in stocks and 43% have been moving money to cash and cash equivalents over the past year, Samana said.

"Unfortunately, it creates a situation where investors are wanting to have their cake and eat it too, since it's very hard to generate higher returns without taking higher risk — like in equities and almost impossible when cash balances are too high — because it returns close to nothing and acts as a drag," he notes.

Samana said Wells Fargo's capital market assumptions suggest that U.S. large cap equities will return 7.7% over the coming 10 to 15 years, U.S. intermediate fixed income will return 3.1% and cash will yield 2.5%. A 50/50 stock and bond portfolio would return 5.4% over this period based on those numbers.

"Even an all stock portfolio would hit its limit in the high (7%) and all of these portfolio returns include an inflation premium, which needs to be removed," he said. "This suggests that more realistic expectations would be somewhere in the 3% to 5% range — after inflation — depending on an investors risk tolerance and possibly even lower for those focused solely on fixed income and cash."

Samana adds this means for advisors having heart-to-heart conversations with clients about implementing some combination of the following solutions: lowering expectations, reworking allocations towards historically higher-returning assets — like equities, saving more money or reducing their living standard in retirement.

Ortiz agrees, saying investors likely will have to save more than anticipated to reach their goals, or extend the time frame to reach those goals. He also adds advisors themselves need to be careful.

"If you plan on these returns and ultimately do not achieve them, you will have very unhappy clients when you tell them that they have to work another five years before they can retire," he said. "It's better to be more conservative now and have the client save more than to over promise and under-deliver. If returns are better than planned under the conservative scenario, the client will end up with even more money than planned."