Paul Rollins, 68, and Jan Moran, 60, came to Asheville, N.C., for the same reasons as lots of active retirees did: the Blue Ridge Mountains, the mild climate and a downtown so pretty and lively that the city has sometimes been called the Paris of the South.
But when the stock market crashed, it took their plans for a leisurely retirement down with it.
"Well, it just made it a nonissue, because our savings have been depleted by 40 to 50 percent," Rollins said. "We have to find some way to bring in some income. It's impossible to continue at this level."
Retired college professor Giorgio Cave, 60, who moved to Asheville last year, said the market's crash wiped half a million dollars off the value of his diversified stock portfolio in 2½ months.
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"It's mind boggling," he said. "You wake up one day you're feeling quite affluent. The next day you've lost half of what you had that you built up over a lifetime."
While younger Americans can live off their incomes while they wait for the market to recover, Rollins, Moran, Cave and millions of other retirees need their savings now.
"The problem for us and most people like us is that we're having to take money out of our retirement at the time when it's most depressed," Rollins said.
Those heavy losses in retirees IRAs and 401ks have translated into losses for the communities they live in, too. In Asheville, after 13 straight years of record-breaking growth, the economy has flatlined.
The popular Savoy restaurant has stopped serving lunch. "The impact here was immediate," said Todd Levick, manager of the Savoy. "Absolutely everybody is scaling back here."
Across the nation, Americans have lost $2 trillion in their IRAs and 401ks in the market's meltdown, putting many retirees in a terrible bind. Approximately, one in four retirees are looking to go back to work because they need the income, according to a recent AARP survey. But in the current economy, almost no one is hiring.
Paul Rollins said he's prepared to sell his house, but home prices are falling and buyers are scarce.
So what's the fix?
Financial adviser Joy Kenefick, who takes a "boot camp" approach to preparing her clients for retirement, said in the short-term the best thing Americans in or near retirement can do is downsize their lifestyles. At her Charlotte practice, clients nearing retirement participate in a " boot camp" where they simulate life in retirement by living on their projected income for at least a year prior to taking the big plunge. She recommends selling some of the "stuff" accumulated over a lifetime -- a second car, jewelry, furniture -- to raise cash and avoid having to withdraw from depressed retirement accounts.
"They can't control the market, they can't control the economy, but what they can control is their consumption, their expenses," said Joy Kenefick of Wachovia Securities. "If they worry about their own expenses, [they can] look inside and decide what kind of radical changes they can make that would dramatically improve their situation" by reducing their expenses.
For now, Giorgio Cave has pared his expenses to the bone.