Madison (WKOW) -- In this It's Your Money report, we examine one of the hard lessons of the financial crisis: the need to manage your retirement accounts very carefully.
For the past 15 months, Americans have watched in horror and panic as upheaval in the financial industry caused them to lose a combined $2 trillion from their retirement accounts.
Michael Collins, UW financial specialist, said, "if you're close to retirement and are heavily invested in the stock market, the only thing you can do is ride it out."
In fact, that's about all any of us can do.
University of Wisconsin financial specalist Michael Collins told 27 News that hanging onto what you have in the stock market at least gives you a fighting chance.
Collins said, "I can guarantee you if you sell now, you will have losses. I can't guarantee that if you ride it out, you'll see gains in the future, but there's some chance."
And for people who don't have time to make up for what's been lost in their retirement accounts, the reality may be harsh.
"People who are heavily invested in the stock market right now who are close to retirement may simply find themselves not able to retire on their original schedule," said Collins.
But Collins points out that, ideally, people who are close to retirement should not have most of their money in stocks.
He said, "have a plan in place so you start getting more safe bonds, less risky investments as you get closer and closer to retirement age."
The safest investments are CDs: certificates of deposit and money market funds, particularly those that invest in treasury bills.
When it comes to bonds, many experts urge investors to buy municipal and highly-rated corporate bonds, which provide a higher yield than US treasuries and are less likely to flucuate in value compared with stocks.
Collins also said, "So I think the lesson for the rest of us is, think about what your target date is as you get closer to retirement. Just because this happened this year doesn't mean it can't happen again, five years away from any of our retirements."
There's no one righ' answer when it comes to retirement fund questions, but many experts agree that older Americans should put some money into risky assets, like stocks, to get more returns so their money will last through the retirement years.