Tall Retaining wall and fence

We are about to have some major work done on our backyard. We have a pretty good slope and would like to level our yard. This will require a fairly tall retaining wall and then a fence installed on top. The retaining wall will be 3-4 ft above ground (and from what I understand, must have another 1.5 ft below ground) and will be a stone wall (I believe it's called milsap stone). We want to put a new 8 ft cedar fence with metal posts on top of it. My question is, is it better to put the metal posts IN the retaining wall or right inside the backyard next to the wall in the leveled yard? I've been told all different things from contractors. Our fear is that if we literally have the posts built into the wall that there is no way to adjust the fence posts if necessary if shifting occurs and that it will be too much pressure on the wall itself if posts for an 8 ft fence are put inside the wall.

I would assume if the retaining wall is shorter (ie. if we tier the yard) and is 2.5 ft or shorter, then it is not a big issues as to whether the posts go inside the retaining wall itself or in the yard next to the wall.

If anyone has knowledge on this, I could really use the help on deciding what to tell a contractor I want them to do.

Thanks,
Jody

If you put the fence on top and the retaining wall moves then the aligning of the fence will be nothing to the problem of fixing the wall.

Put the fence on top 3-4 ft is not too high if the wall is built properly.

Check the Boral web site for more info.

jgib, you will have to give more detail or a diagram as it is very hard to understand what your on about.
I take it you are a seppo - use of imperial, cedar fence and milsap stone.

Is the wall to be dry laid, or are you using the stone to clad a masonary wall or solid stone.

Placing the wall 1.5' underground seems weird to me.
What is the fence for, is it a boundary fence ? or an internal fence in your property. An 8' fence is a high fence.
When you suggest putting the fence posts right inside the backyard do you mean on the lower level or the upper level in relationship to the wall?