Q. I am almost 70, and expect to retire the middle of this year with savings (IRA, 401k and company retirement lump-sum) that total about $1.5 million. I plan to roll everything to an IRA but will keep about $100,000 in liquid assets in the IRA for house renovations. The rest ($1.4 million) would be invested with the idea of paying us about about $30,000 a year.

I have been approached by several financial planning institutions. They are offering to manage my investments for an annual management fee of 1.25 percent to 1.5 percent. I agree with you that such expenses could represent a large amount of my investment earnings.

My social security income is about $24,000; my wife is 52 and I expect her to live to about 95. I expect to live to 90. She earns $30,000 and expects to retire at 65. She will then get paid about half of my social security.

We would like an annual income of $76,000 to $84,000 after taxes, but we don't know if that is reasonable. Can you suggest a fund mixture with low management fees we can invest in (such as the couch potato)? Also, how do we go about arranging for monthly or quarterly payments? ---J. P., by email from Los Angeles

A. You've got two issues here. The first is setting reasonable expectations for your retirement spending. The second is sorting out what is acceptable for investment management fees. The good news is that your expectations are reasonable. There is no reason a couple with good Social Security benefits and $1.4 million in investment assets can't enjoy after-tax income approaching the high point of your range, $84,000.

You should be able to draw from your investments at a 4 percent annual rate without endangering your portfolio's long term survival. That provides you with income of $56,000 from investments, $24,000 from Social Security, and $30,000 from your wife's earnings--- a total of $110,000. The California state income tax could take your net below $84,000 but you'd easily have the minimum $76,000 you seek.

Later, when your wife retires, your total income would be $92,000--- $56,000 from investments, $36,000 (or more) from Social Security--- and your after-tax income would be still be over your $76,000 minimum. In addition, you should be able to nudge your withdrawal rate higher at that time because you'll be 83. You could, for instance, convert a portion of your investments into a joint life annuity.

The most common investment management offer today is called a mutual fund "wrap" account in which a management firm offers to manage your money for a fixed percentage of assets and the money is invested in mutual funds. (Another version of the same idea puts the money in separate accounts rather than mutual funds.) As a consequence, it is important to understand the total expenses you are facing. When the underlying management expenses of the funds are added, for instance, you could be looking at total expenses of 2 percent a year, or more. This is likely to have a major impact on your investments.

You should be targeting total expenses of 1 percent a year, or less. With your assets, you have many choices. Here are several:

• You could be self-managed and manage a simple Couch Potato Building Block portfolio for less than 35 basis points a year.
• Another choice would be to invest one or two low cost funds with good long term records--- such as balanced fund Vanguard Wellington (annual expense for Admiral shares, 0.18 percent) or Fidelity Puritan (expense ratio 0.62 percent).
• You could also find a broker with a "big book" of clients in American Funds. If you did this, there would be no up-front commission cost to you because your investment would be over $1 million. (Your broker would be paid, but not from your money.) The annual expense ratios of their funds vary but a large and successful fund like American Funds Income fund A shares has expenses of only 0.54 percent a year. Of that amount, 23 basis points would be paid to the broker as a "trail" to provide continuing service.
• There are also "boutique" firms that manage portfolios for individuals and families. Their pricing tends to be lower than the pricing of the major brokerage firms. Among these firms it is possible for the $1 million and over investor to have total management costs under 1 percent a year.

In my experience, the "you get what you pay for" claim from high cost firms is bogus. Pricing is a function of the business model of the firm and the amount of varnished wood and marble in their offices.

However you invest, it is easy to arrange for monthly or quarterly disbursements. As a practical matter, quarterly payments make more sense.