Even before the current crisis, when the economy and markets were perceived as faring well, study after study indicated that Americans were failing to put aside enough to last through retirement.

Recent data suggests that the problem has only deepened. As of early December, 2.2 million Americans between the ages of 56 and 65 lost, on average, between 23% and 24.5% on their 401(k) plans in 2008, according to the Employee Benefits Research Institute (EBRI).

Federal Reserve data suggests the nation's public and private pension funds have lost $1 trillion, or about 10% of their assets, from second quarter 2007 to second quarter 2008, according to Congressional hearings in October that looked into what impact the financial turmoil is having on retirement security. "I think people will definitely have to work longer, but to be honest, most of them should have been planning to work longer even before this happened," says Jack VanDerhei, EBRI research director.

Anecdotally, advisors say many of their clients are rethinking retirement dates, considering part-time work, postponing or canceling vacations and cutting spending in other ways to hunker down.

There are also those, in the small minority, who can't bear the losses and the wild market swings. They want to cash out of the market and, quite often, advisors will comply with the request. "When you say, 'Hey, just hang in there,' how many times is it before you are just long in the tooth?" says Jordan of Lexco Wealth Management.

He's had two clients pull all their money out of the market. One was a retiree he describes as a "Felix Unger type" whose request didn't surprise him. Jordan was more surprised, however, when one of his longtime clients, a "brilliant PhD" still several years away from retirement, decided to exit the market for six months.

"He's been investing for 30 years and is an astute guy," Jordan says. "He said he's been to this party when everything feels bad. He told me he didn't want to do it this time."

Jordan hasn't made significant changes in his investment approach, which emphasizes locking in short-term income through low-risk fixed-income vehicles. But the crisis and its impact on investors has caused him to have some doubts about modern portfolio theory.

"When the facts change and you use a universal assumption things will be the same as they were historically, people get crushed," he says. "I believe things have changed and it will be a different climate going forward."

Mark Cortazzo, senior partner at Macro Consulting Group in Parsippany, N.J., says his firm continues to invest for the long term but has decreased client exposure to equities as the crisis plays out. "A lot of that is driven by how much income they need and how much is discretionary spending versus need," he says.

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