Taking a hit on the cusp of retirement

The former Peace Corps volunteer dreams of returning to teach in the tiny African country of Lesotho for a few years. The old hut, made of dung and adobe, where he lived in his 20s is empty and waiting for him.

But last year he made a serious misstep. He walked into his local Wells Fargo branch and asked for a safe investment for some of his savings.

Unknown to him, the fund the bank sold him was filled with sub-prime loans. Even worse, it contained a clause that might prevent him from selling all shares at once to halt his mounting losses.

Less than a year after he invested $100,000 in the fund, the balance stands at $84,000. The fund is charging him 3.01% -- roughly $3,000 a year at the start -- in expenses.

"I was naive," Bowne said. "So much for trusting your bank."

Financial planner Sandra Field of Los Alamitos, who sat down to help Bowne, said there's a chance that he could lose it all. "He thought he was being extremely safe and conservative," she said.

Bowne is like many other on-the-cusp retirees who, as they watch the market fluctuate, can easily suffer significant losses while trying to protect assets. Some are postponing retirement.

"People are overwhelmed," Field said. "It's dicey out there."

After recent calls and visits to Wells Fargo, Bowne said a bank manager returned a call last week to say he had submitted Bowne's request to sell his shares.

Bank spokeswoman Mary Trigg would not comment on an individual customer, but said the bank's offerings are broad "so that our financial consultants can tailor their solutions directly to their clients' individual risk tolerance and investment goals."

Fortunately for Bowne, losing all $100,000 probably won't derail his retirement, but it could curtail future spending.

Without that money, he has $861,000 in retirement and investment accounts and equity in his home. Field said that amount, along with savings from strong retirement income, should keep his plans on track.

Bowne has been living conservatively to prepare for his retirement. For the past seven years, he has been contributing the maximum he can -- $15,500 a year -- to his company-offered 401(k) account. He also saves an additional $10,000 a year to non-retirement savings.

A trim, lifelong bachelor with a tidy white beard, he made $80,000 last year selling computer supplies and equipment for Torrance-based MacMall.