"Many people knew there would be volatility with the stock part, but they never anticipated losing money in their bond portfolios," says Rogers.
Not all those near or in retirement are cowering in fear. Anna Ibrahim, an Ameriprise financial advisor from Rockville, Md., says a 63-year-old client with retirement assets in excess of $1.4 million just sent her another $55,000 to pump into the market. Although many are concerned, few of her clients seem panicked and she attributes the ability to ride out the market to proper financial education and understanding. In fact, Ibrahim says she is doing very little selling and has been overwhelmed with buy orders.
"There's not much panic for someone who is educated and understands what is going on. I think it is the fear factor we are putting out there that is scaring people," says Ibrahim.
Caution reigns for those in midcareer
Depending on how much they've got stashed away in retirement accounts, those with a decade or a little more still have time to catch up. Jim Parker, a 47-year-old telecommunications product line manager from Dallas generally feels confident and is sticking to his investment plans. Parker stayed in the market during the downturns of 2001 and 2002 and says that in 2003, his portfolio "took off like a rocket ship."
"I'm essentially doing the same thing now. Considering my age, I am still investing heavily in stock-based mutual funds. I was richly rewarded in the last turnaround for staying in the market," says Parker.
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Parker has made slight adjustments including shifting a little more money into bonds and Treasury Inflation-Protected Securities (TIPS) because he fears the financial bailouts will increase inflationary pressures. After seeing many banks fail, Parker also spread some of his cash holdings to multiple institutions. And when it comes to real estate, he isn't worried since he doesn't plan on selling his home and has never counted it as a retirement asset.
Those in the middle of their careers not only can make up losses but still have the time to profit off badly beaten stocks. Since 1922 there have been 16 official bear markets -- defined as a major stock index drop of 20 percent or more in one year. Of the 9,194 stocks tracked by Standard & Poor's Compustat research service, 3,518 are now trading at less than eight times their earning over the past year.