Pat and Larry Roop had never expected luxury or riches in retirement. At most, they'd daydreamed about a log cabin in a peaceful Maine town. But three years into a stock market plunge that now rivals the worst crashes in history, they worry that they'll have to work well into old age to pay the bills.

''We just figure we'll never be able to retire,'' said Pat Roop, 52, an accounts payable supervisor at a Hingham health care company. ''We're middle class people, just struggling to stay middle class and put their kids through school. We hope we can work four days a week when we're in our 60s.''

For most Americans, the collapse of the market since March of 2000 has not only delivered a crushing blow to investment accounts, but also to their plans, indeed to their present way of life. Many people have lost a quarter to a half of their life savings in two years.

Analysts say it could take anywhere from three to 10 years to recoup those losses, a harsh reality that is likely to put a chill on the economy's recovery as consumers curtail spending after losing so much wealth.

''For baby boomers, and for generation X-ers who've been working 10 years, this is clearly an event as seminal as the Great Depression,'' said Daniel Leemon, chief of strategy at Charles Schwab & Co., the San Francisco-based brokerage firm. ''This will be the defining event for a generation.''

Even grizzled veterans of the investment business have stopped saying they've seen a bear market worse than this one. It has lasted longer than the 21-month decline from January 1973 to September 1974, when the benchmark Standard & Poor's 500 Index declined by 43 percent. In the past 28 months, the S&P 500 has slumped 42 percent.

Even more damaging to the investor psyche: The Nasdaq market's catastrophic 76 percent drop since the peak in March 2000 is close to the 83 percent plunge in the Dow Jones Industrial Average from September 1929 to June 1932. Then, the Dow took 12 years to come back.

''This is awful compared to the 1974 bear market,'' said William Dougherty, president of Kanon Bloch Carre, a Boston money management firm. ''This is more painful than '74 because more people have lost money.''

Indeed, more than half the nation has money at stake in this downward spiral - from blue-collar workers and single mothers to retirees living off the income from their retirement funds.

Stock dives of prior decades afflicted mainly institutions and very wealthy individuals. The 401(k) retirement plan didn't exist in 1974, and corporate pension funds in those days tended to be conservative, investing more heavily in bonds than in stocks.

The violent market drop last week seemed to crystallize the malaise investors have been feeling in the face of relentless losses and the daily barrage of scandals in corporate America.

The Standard & Poor's 500 Index fell 6.8 percent, to 921.39, and the Dow Jones Industrial Average plummeted 7.4 percent, to 8684.53, while Nasdaq slumped 5.2 percent to 1373.50. The S&P and Nasdaq hit five-year lows, and investors ended the week worried that the market has not hit bottom.

Most Americans consider their 401(k) plan at work their main, and often only, investment vehicle. At the end of 1999, when the boom was still in full throttle, the average workplace account holder was 41 and had $55,502 in his or her portfolio, according to the Employee Benefit Research Institute in Washington, D.C. By the end of 2000, the year the market peaked and crashed, that figure had fallen almost 12 percent, to $49,024.

There are no official numbers yet for the toll exacted on the average 401(k). But the hit is bound to be at least 13 percent, reducing the average balance to about $42,558, if data from Lipper, Inc., the New York fund tracking firm, are interpreted in the light of conservative assumptions about investment patterns.

If average account holders have lost one-quarter of their money in 21/2 years, more aggressive or wealthier investors - those who had more than the average 70 percent of their money in company stock or stock funds - in many cases have lost much more. Depending on the circles in which you travel, you probably know people who've lost more than half their money after loading up on funds the focused on Nasdaq's volatile technology stocks.

For baby boomers, the setback is especially agonizing. Most became serious about investing in the 1990s, and had come to hope the wind at the market's back would help them make up for lost time. Many shifted their portfolios to be more aggressive, in effect taking on risk in an effort to capture the annual returns of 20 percent, 40 percent, and 80 percent that became common from 1995 through 1999.

Tom Frackiewicz, a 43-year-old wood-products salesman from Byfield, was more careful than most. He bought blue-chip funds with brand-name firms. Still, he's disgusted with his results, having seen his $44,000 401(k) plan lose $4,900 since April.

''I haven't made any money in three years,'' Frackiewicz said. ''I should've bought a new car; I'd be better off. I should have gone to Tortola. I should've just burned it, because it's going down the tank.'' He also is dismayed to have lost money in an account he needs to tap sooner, a 529 college savings plan that he and his wife had set up for their 6-year-old daughter.

''You put money in, and you lose it the next month,'' he said.

Frustration and anger have crept into the voices of paralyzed investors, who had come to believe the 1990s mantra that market dips were brief interludes followed by large rallies. The market shock of last week pushed the major indexes deep into negative territory, dealing investors losses similar to last year's.

Said Schwab's Leemon, ''People are angry, disappointed, miserable.'' And they don't know what to do with their money. They're still investing part of every paycheck in their 401(k), or setting money aside for an IRA, as specialists suggest they continue to do at these low prices, if they can stomach the market's zigzagging. Many still need to diversify their fund holdings. And they're looking for safe havens, including bank CDs.

In the first five months of this year, $68 billion flowed out of money market accounts, a huge reversal from the $199 billion sent into such funds through May of last year, according to the Investment Company Institute, a Washington, D.C., trade group.

Analysts used to say that money was sitting on the sidelines, waiting to go into stock funds. But this year, it appears to be going into CDs, or to pay bills for people who are out of work.

Allen Sinai, chief economist at Primark Decision Economics in New York, said this bear market is likely to change the way people invest and spend their money.

''The collapse of the stock market and its prolonged decline makes it one of the worst stock market episodes ever,'' Sinai said. ''It will have a significant dampening effect on consumer spending in the months ahead, which calls into question the recovery.''

Joan Parcewski of Billerica is an example of the increasingly cautious consumer. She is 54 and has her own financial advisory business. She said she believes the market will eventually come back, but she's shifted her portfolio over the past year to be more conservative, moving money into government securities and bonds. She also is putting off unnecessary spending, like the gazebo she'd wanted to build in her backyard this summer.

''After pricing it out and figuring it would cost between $4,000 and $5,000,'' she said, ''I've postponed it until maybe next year.''

Multiply Parcewski's unease by that of millions of people, and one can see why economists are predicting a slowdown in the spending that so far has helped keep the economy afloat. Andy Trincia, a former Fidelity Investments executive who tried his luck at a West Coast startup that flopped, is sitting out the ugly job market and the stock jitters on a Peace Corps assignment in Romania.

''I hope the markets bounce back and my money will continue to work for me,'' said Trincia, who is 35. ''I'm not getting a salary for two years. In the last four weeks, I haven't looked at my account, nor do I want to.''

Almost everyone feels poorer today than two years ago. Sheryl Marshall, a venture capitalist at Axxon Capital in Boston and a former stockbroker, said, ''Everybody is in pain.'' A self-described unrepentant capitalist, she still believes the market will eventually roar back. And she doesn't buy the tales of braggarts who say they moved into cash before the market collapsed.

''If you meet someone at a cocktail party who says that,'' she said, ''walk away.''

© Copyright 2002 Globe Newspaper Company

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