How should you invest in a bad economy? Stocks? Bonds?

Enough. The stock market — and your savings — have gone down steadily, day after day, for more than a year.

You've lost thousands this month alone. It's time to do something. But … what?

Should you shift more money into stocks? Put it all into a savings account? Pay off your mortgage? Hop a freight and become a hobo?

"I could no longer watch in horror as the amount in my 401(k) kept sinking to new lows," says Ciarán O'Tuathail, 35, of New York City. "I transferred 100% of my retirement money to the guaranteed interest rate fund of 4.4%."

Experts agree: You should do something. The financial meltdown is the most serious since the Great Depression. Nearly $2.1 trillion has evaporated this month alone.

And if you were hoping to have a certain amount in savings by a certain date, well, you need to do some recalculating. It takes an average of 3.3 years to recover from the average post-Depression bear market, according to InvesTech Research.

But what you should do depends on your age, how soon you'll need your money, and just how terrified you are. USA TODAY's Kathy Chu, Matt Krantz, Sandra Block, John Waggoner and Christine Dugas talked to some of the nation's best financial advisers to find out what financial moves people should make now, based on their ages.

If you're in your 20s …

You're likely just getting started with stocks and bonds. As the market plunges, you can find some comfort in the fact that you probably haven't lost as much as other investors.

Young investors tend to panic less about the market because they have less to lose, says Jeff Eschman, a financial planner who works with young couples in Houston. Because these people are just starting their adult lives, they'll also have many years to recover from market downturns, he adds.

One mistake young investors make is confusing the principle of investing aggressively with making risky investments, says Sheryl Garrett, founder of the Garrett Planning Network, a network of advisers who charge by the hour. In your 20s, you should be putting at least 80% in stocks.

But ignore the advice that you should make your riskiest investments when you're young. You have lots of time — which means you can invest in a conservative stock fund, accept a lower return, and still reach your goals without worrying about catastrophic losses. "There's no need to be in tech stocks or emerging markets," Garrett says. "You can find great opportunities in stodgy old-fashioned blue-chip stocks."

As you invest, don't ignore your debt. Paying off a credit card that charges 25% is the rough equivalent of earning 25% on your investments — and not many investments will do that. Garrett says to put half your money into mutual funds and half toward debt. And your mutual fund investments can double as an emergency fund, Garrett adds.

If you're in your 30s …

Generation Xers, now mostly in their 30s, aren't strangers to tough times. Many graduated from college facing an ugly job market that forced them to take jobs they were embarrassingly overqualified for. Reality Bites was the movie that spoke to the generation.

But even for Gen Xers, the current environment does, indeed, bite. Not only have most Gen Xers saved and invested enough to be hurt badly by the breathtaking downdraft in the market, they now have cash-hungry obligations on top of that. At this stage in life, it's not uncommon to have a child or two plus payments on a house they may have bought during the real estate bubble. And most workers in their 30s don't have the security of pensions, as many of their parents did. Some suggestions for actions for 30-year-olds:

•Prioritize retirement savings. Don't let fear squander your opportunity to take risks when saving for retirement, says Brian Kazanchy of wealth-management firm RegentAtlantic. Keep contributing to your retirement accounts, even if it means taking a break from contributing to college savings plans, he says.

•Protect yourself from the risk of unemployment. Keep enough cash around to hold you over for six months if you have a working spouse, and even longer if you don't, says Jack Ablin of Harris Private Bank. If you don't have that much on hand now, don't sell stocks, just keep adding to the cushion, he says.

•Consider ways to calm your portfolio temporarily. While it may be tempting for 30-year-olds to panic and move more than 30% of their portfolios into bonds, which are less risky, that may be hasty, says Stephen Minihan, financial planner at Westlake Financial Advisors. You might incur needless trading costs and position yourself poorly when the market comes back. Instead, investors in their 30s who want to easily and temporarily smooth their returns, can consider adding an exchange traded fund that bets against the market, such as the UltraShort S&P 500 ProShares, which trades by the symbol SDS. If the market falls 1%, this ETF rises 2%, thus counteracting part of the declines. Just a small 5% allocation to such a fund could even the portfolio's returns until the investors feel more comfortable reverting back to their long-term allocation, he says.

•Try playing with 401(k) contributions to make you feel better. If you're nervous about the stock market, consider putting fresh contributions into the money market options in the 401(k), says David Bergmann, financial planner with The David R. Bergmann Group. That way you can feel at least your newest contributions are safer and that you're doing something to protect your nest egg.

If you're in your 40s …

With any luck, these are your prime earning years. That means you should be stuffing as much as possible in your retirement savings plan, even if it means cutting back on spending.

"It's a great time to be accumulating money in your retirement account," says Alexandra Armstrong, a financial planner in Washington, D.C. "Don't stop contributing to your 401(k) plan."

In particular, don't abandon the stock market. If you're in your 40s, you still have time to recover your losses. Nervous investors who stash all their savings in certificates of deposit and money market funds "are committing financial suicide," says John Sestina, a financial planner in Columbus, Ohio. The average money market fund yields 1.18% now. Those returns won't keep up with inflation, especially after taxes, he argues, and they won't be in a position to profit when the market recovers.

But don't go overboard. You're young, but not that young, so don't take big bets on risky companies when you can buy quality at a discount, planners say. Blue-chip stocks "are the best places to be because they're going to have solid balance sheets to ride this out," Armstrong says. And, at least at the moment, the dividend yield on the Standard & Poor's 500-stock index is higher than the yield on the 10-year Treasury note,

Finally, stay diversified. In this bear market, diversification didn't help much, because everything got hammered. But going forward, diversification will make a difference, says Greg Womack of Womack Investment Advisers in Edmund, Okla.

A truly diversified portfolio, Womack says, has a good mix of stocks and bonds, and also contains some real estate and precious metals. That way, he says, you'll always have some exposure to the highest-returning sectors.

If you're in your 50s …

First rule: Don't do anything rash, says Kurt Brouwer, a Tiburon, Calif., financial planner. Don't pull all your money out of the stock market. Don't throw all of it in, either.

Second rule: Keep saving. Your losses are awful. But your contributions over time will ameliorate those losses. For example, suppose you had $200,000 in your 401(k) plan a year ago. You earn $150,000 a year, and contribute 7% of your salary to your plan each year. You figured that if you earn 5% a year and get 3% raises, you'd have about $750,000 in your account by age 65.

But now your $200,000 is $100,000. If all your other assumptions hold true, you'll have $535,000 in your account by age 65 — a bad loss, but not a 50% reduction. Increase your contribution rate to 10% and you'll have about $674,000 in your account at age 65.

Don't overlook any way you have to boost your savings, no matter how small. For example, if you're saving in a taxable account, sell some of your biggest losers and take the tax deduction, says Gary Schatsky, a New York planner. You can use your losses to reduce any capital gains you might have, and deduct an additional $3,000 from your income. You can carry any unused losses into the 2009 tax year. "Don't leave tax savings on the table," Schatsky says.

And make sure you're not paying too much for your investments. Consider two funds, each of which earn 9% before expenses. Fund A charges 0.75% a year. Fund B charges 1.50% a year. After 15 years, a $100,000 investment in Fund A will be worth $355,500. Fund B? $318,000 — $37,000 less.

Finally, bear in mind that you have longer than 15 years to make up your losses, even if you retire at 65. When you stop working, you'll need to withdraw enough to live on that year — not your entire retirement kitty, says John Markese, president of the American Association of Individual Investors. With luck, you'll live another 20 years, and that's plenty of time to make up your losses.

If you're 60 or older …

Frankly, you're in the toughest position. These people have less time to recover their losses. Any withdrawals reduce their accounts further — and limit their gains when the market recovers. And fewer than half of elderly households have any income from pensions, according to the Congressional Research Service.

Retirees are not without some options, but unless they were mainly invested in safe investments, they will have to lower their expectations.

•Consider putting off Social Security as long as possible. Each year you put off starting your benefits between ages 62 and 70 you increase your Social Security payments by 8%. "For many people it's the sole source of lifetime income, and the longer they wait, the larger that benefit will be," says Jean Setzfand, the director of financial security for AARP.

Some people already started withdrawing Social Security when they retired at age 62, but now with the market down, their assets have shrunk and they need a bigger income. Few realize that they could pay back to Social Security the benefit that they have already received in the previous years and get a higher benefit at a later age, Stezfand says.

•Cut back on withdrawals if necessary. Consider a person who has saved $1 million and planned to take out $40,000 the first year. But now his account is worth $700,000. One choice is to cut back his withdrawal to $28,000 to help hold onto his savings, says Christine Fahlund, senior financial planner at T. Rowe Price.

"It's a huge drop," she says, "So these are stop-gap measures."

For example, if he had already planned on taking out $40,000 and really needs to live on it, he could go ahead and withdraw it, Fahlund says. But to preserve his retirement savings, he should forgo any increases for inflation. "Hopefully that will be tolerable," she says.

•Work part time. You'll supplement your income and hold off tapping too much of your savings while it recovers, Setzfand says.

•Consider an annuity. An immediate, fixed-term annuity turns a lump-sum investment into a periodic stream of income. An immediate annuity isn't without risk. For most of them, inflation can erode fixed payments over time.

•Invest for your comfort. If you're so worried about the stock market that you are not sleeping at night, then consider moving some money into safer investments. "Retirees have to latch onto more income-producing and safer investments," says Austin Frye, a financial planner in Aventura, Fla. "Even insured CDs are not a bad option."