>> Sam and Merna Catalinia were hoping to raise a glass to retirement five years from now.
>> Sam Catalinia: But that's all changed.
>> Sam owns a San Francisco real estate business.
>> Sam Catalinia: Things just stopped.
>> And his nest egg has been eaten away by the recession.
>> Sam Catalinia: My retirement portfolio is down about 25 percent.
>> Now he doesn't know how to invest what money they still have.
>> Sam Catalinia: I'm still searching.
>> Real estate and the stock market were supposed to be the reliable investments, but the financial crisis has turned a quarter century of assumptions about retirement savings upside down.
>> Definitely it's created a serious level of fear.
>> Ted Benna has lost about 20 percent in his retirement fund and he's not just any investor.
>> Ted Benna: I'm commonly identified as the father of the 401(k).
>> In 1980 Benna a financial consultant created what's now the main retirement savings plan for most American workers.
>> Ted Benna: Yeah, I think what made this so difficult is the fact that stocks and bonds tank together you know the strategy of being diversified just didn't work.
>> Thank you for calling Vanguard. Hope you have a nice day.
>> So worried investors have been lighting up the lines at Vanguard the countries largest mutual fund group where everyone is asked to pitch in and take calls.
>> Thank you for calling the Vanguard Group. This is Bill McNabb speaking to you on a recorded line.
>> Even CEO Bill McNabb.
>> How much money do you manage here?
>> We manage about 1.1 trillion.
>> At Vanguard which sends out statements to 20 million accounts McNabb says the crisis has changed investors. Three years ago a typical Vanguard account had 70 percent in stocks. Today that's dropped to 62 percent.
>> It's going to be transformational in terms of how people think about risk, how people think about savings and those actually could be healthy in the long run.
>> For years now Americans have put little money aside counting on double digit returns from the stock market to bail them out.
>> So when do you plan on price inaudible.
>> We've expected the stock market and the real estate market to do all the work for us.
>> Absolutely.
>> We have to do it ourselves.
>> We're going to have to do a lot more of it ourselves.
>> McNabb says the savings rate is one of the most critical issues facing the country. Among Americans nearing retirement about 60 percent have less than 100,000 dollars put away.
>> How much does our savings rate need to go up?
>> Today if you look at what the average 401(k) participant saves between 9 and 10 percent our math would say it needs to be more like 14 or 15.
>> For the average American raising the savings rate to 15 percent of his or her income would mean another 2,200 dollars a year. What's more the father of the 401(k) says the wise retirement strategy now is to keep training so you can keep working.
>> One way you avoid of having your retirement nest egg run dry is being able to continue to earn a paycheck.
>> Sam and Merna Catalinia are confronting that reality.
>> Not all is lost. I mean, our lives are just evolving differently.
>> Background Music Like millions of Americans they're adjusting to a new economy and new expectations. Anthony Mason, CBS News, Malvern, Pennsylvania.
==== Transcribed by Automatic Sync Technologies ====
