Across the Country, Fear About Savings, the Job Market and Retirement

by LAURA M. HOLSON A year ago, Robert Paynter was comfortably retired and looking forward to years of refurbishing old cars and boating from his dock on Lake Norman in North Carolina. Over a 17-year career at Wachovia, he amassed a pile of stock and options from the bank that he had assumed would be worth more than $600,000. But now the options are worthless, and he watched the value of his Wachovia shares shrink to about $15,000 before he sold all of them this week after the bank succumbed to the financial crisis and its stock fell to fire-sale prices. The rest of his investments are in free fall. It’s like having an out-of-body experience, said Mr. Paynter, 61. It’s like being in a hospital bed and watching yourself dying. Whatever the bottom is going to be, I wish it would just get there. It’s the every day, watching the blood drain out of it, that’s hard to take. To be sure, he has enough savings to not worry about missing any meals. But Mr. Paynter is resetting his plans for retirement, and has already canceled a trip with friends to Europe next year. Today I’m O.K., he said. But a year ago I felt like I was in great shape. Across the country, Americans are tallying their many losses from the relentless rout in the markets. Financial message boards on the Internet are filled with confessions of fear – about hits to savings, job security and scuttled retirement plans. My plan was to never work again, wrote one person who posted a comment on Bogleheads.org, a Web site for investors who follow the long-term investing advice of John Bogle, founder of the Vanguard funds. But somebody called me yesterday to see if I was interested in a job, and I am thinking maybe I will go back to work. It is not just the declines in savings that people are feeling, reflected in the shrinking balances on quarterly banking statements now arriving in mailboxes. Based on interviews around the country last week as the market continued its steep slide, many people say they are sensing losses beyond the short-term hits to their portfolios. Some feel a loss of faith in the United States and its government. Others are lowering their sights for the kinds of lives they expect to lead in coming years. Maybe we have to readjust our expectations, said Nicholas Gaffney, a partner in a San Francisco public relations firm. No one is entitled to anything. Mr. Gaffney describes himself as a buy-and-hold investor, and he has been sensing good opportunities of late. He has plowed more than $10,000 into his funds. The value of his portfolio, now at several hundred thousand dollars, has dropped more than a quarter. He confesses he has been fighting with himself over how closely he should follow the market’s gyrations. One day, he checked the market on his Treo cellphone about 200 times. I thought to myself, ‘What am I doing?’ he said. I had to stop because I was driving myself crazy. I think everything is going to be fine if people don’t panic. That is wishful thinking at this point. Investors have withdrawn more than $81 billion from stock mutual funds since the beginning of the year, with nearly 40 percent of that coming in the last six weeks, according to AMG Data Services, an industry research firm. Not everyone is panicking, of course. Some are able to see the big picture or find ways to distance themselves from the crush of news about the market. Maybe a shrink would have a field day with me, said Beth Sparks, 40, a self-employed lawyer in Colorado Springs. But I have an ability to not think about it. A week ago, Ms. Sparks reviewed her investments for the first time since January. All are down roughly 30 percent. But Ms. Sparks said she was not concerned because she and her husband did not have a lot of debt. When her husband inherited $50,000 last year, they used it to pay off their mortgage. Vacations typically mean drives to Arizona to spend time with her parents. I’m just happy me and my family are healthy, she said. Peter Schade, 49, who runs his own ad design firm in Farmington Hills, Mich., said each day of bad news was a blow to the idea that he would ever be able to retire. I’ve kind of resigned myself to the fact that I’m going to be working for the rest of my life, he said. For the last few weeks, Mr. Schade said, he has been closely monitoring the news on the CNN satellite radio network in his car. I just feel numb, he said. The news is changing every half hour. Mr. Schade said he and others in the Detroit area were accustomed to weathering downturns in the economy. It doesn’t make it any easier, but we’ve sort of fortified ourselves, he said. In many ways, he said, the rest of the county is just now starting to feel what Detroit has been going through for years, giving people here a head start in coping. Detroit was the canary in the mine for this. We started this at least three years ago. Tom Drooger, 56, of Grand Haven, Mich., is president of a chapter of BetterInvesting, an investment club affiliated with the National Association of Investors Corporation. Usually, Mr. Drooger is the type to study stocks closely and track the market’s movement throughout the day. By Friday, he was no longer even paying attention. He has decided to stop watching the market news on CNBC for now and instead puts on easy-listening music. There’s nothing you can do about it after a while, he said. He compared the financial crisis to a house on fire and said he was merely waiting until the flames die down. Once the fire’s out, you go in and do the repairs, he explained. To start to try to move things around until the market wrings itself out is pointless. I’m just sitting on the sidelines, leaving everything where it’s at. College students are watching from the sidelines, too, since they typically are more concerned about jobs at this stage of their lives than the nest eggs. Matthew Ehrlich, 23, a second-year law student at Wayne State University in Detroit, is worried about whether the economy will improve before he graduates in 2010. If things don’t get better in the next two years, I’m going to have a real tough time, he said. My hope is that I can just ride it out until the financial markets get back on track. Mr. Ehrlich is still debating what type of law to specialize in and said this crisis might ultimately influence his decision. The way things are going, bankruptcy law seems to be pretty hot, he said. Beyond the personal toll to their savings, some people said they were concerned about what the financial crisis said about the United States. All I can tell you is it is a lack of faith in America, said Pat Emard, 65, of Aptos, Calif., who now worries she may have to go back to work. People have lost faith in our government. I don’t know what happens now. That sense of uncertainty is also troubling to Renee Snow, 73, a retired teacher who taught in the Chicago public schools for 38 years. Born during the Depression, Ms. Snow said it was in her DNA to save, save, save. Over her career as a teacher, she did just that, and Ms. Snow, now a widow, lives off her teachers’ pension and income from her tax-exempt savings plan. She says she has always put her money in insured products when she could. I never watch the stock market, and now I’m watching it every day, she said. She has money socked away in savings accounts in different banks but recently began researching whether her banks were solid. The economy is a frequent topic of conversation among friends at the Jane Addams Senior Caucus, an organization in Chicago where she volunteers as a board member. Over the last couple of weeks, a general malaise has taken over, Ms. Snow said. It’s very hard to have much faith in what the government is doing when they change it every day, she said. As you read more and more about how we got into this situation, you have less and less faith of how we’re going to get out of it. She has an ominous feeling about the future, she said. You don’t go through life thinking the bank I do business with could go belly up tomorrow, she said. This is a new feeling people are living with. Nick Bunkley and Crystal Yednak contributed reporting.