Q&A: Scared investors get help from financial advice hotline

American families are standing on a financial edge, looking down at the economic crisis and the plunging stock market. No wonder many people are frightened and need some financial hand-holding.

On Monday, many had a chance to ask for help when USA TODAY and the Financial Planning Association held a personal finance hotline. Hundreds of people called in to talk to a planner or sent e-mail questions. No one seemed more worried than retirees and those who are close to retirement.

Some brought up very detailed financial issues, but many consumers just wanted someone to tell them their money is safe, says Patricia Solberg, a financial planner in Seattle.

In a show of how much stress people are under, callers stayed on the phone with planners as long as they could. The chats lasted 10 to 15 minutes, compared with previous years of personal finance hotlines when calls lasted only five minutes.

Even some people who have a personal financial adviser called a hotline FPA planner for more support. It's like people who have a good doctor but still want to call the American Medical Association to get a second opinion, says Al Benelli, a financial planner based in Trooper, Pa.

Having enough money for retirement was clearly the main cause of anxiety. After all, the Wall Street crisis has wiped out $2 trillion of retirement savings, according to a report Tuesday from Congress' top budget analyst.

Even before the meltdown, many Americans knew that they had not been saving enough for their retirement needs.

For most people, retirement is a huge funding worry, says a new FPA study. Of 3,022 adults it polled online this summer, 18% said they waited until age 42 or later to start saving for retirement. The FPA says people find it easy to procrastinate on retirement saving when they're young or when they're paying for children's college educations.

Among all ages of callers, the top question was: Should I sell all of my stock?

Unless the callers said that they need to use some of their money in the next three years, the planners told them to hold tight until the market comes back. Unfortunately, planners said, too many people sell during a stock market slump to jump into safer assets.

"The biggest mistake is that people forget what they have learned. They should buy low and sell high. But they have a tendency to do the opposite," says Benelli. "Greed makes them buy, and fear makes them sell. I think that the biggest value that I bring to my clients is to help them take the emotions out of their decisions."

Pros: If you can stand the pain, stick it out

Hundreds of readers called the USA TODAY and Financial Planning Association personal finance hotline, staffed by FPA planners during their annual conference in Boston on Monday. More than a hundred readers sent in e-mail questions. Here are some of them:

Q: I'm worried about the stock market crash. Is it the beginning of a total meltdown? I'm about seven years out from retirement.

John Bailey, Houston

A: The (down) market is a direct result of the global economy, says Catherine Seeber, a planner in Philadelphia. The plunge in worldwide stocks showed that the credit crisis was spreading. Despite how frightening it feels, it's not a good time to sell everything.

Q: About 75% of my investments are in equities. Since we want to retire in three to five years, I wonder if it is time to get out of the market or stay in and ride it through?

Dave Butash, York, Pa.

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