Like many Americans, Steve Kriegsfeld has been watching his life savings bounce up and down each time the stock market takes a dramatic turn.
Lately, it's the drops that have grabbed his attention. In just one day last week, the Dow Jones industrial average plunged 465 points before partially recovering. It is down nearly 6% since Jan. 1.
"Does it concern me when it goes down? Yes," said Kriegsfeld, a 61-year-old Phoenix resident who started stashing away money for retirement when he was in his 30s.
The insurance agent makes it clear he is not "ready to jump out the window" when his portfolio takes a hit. But he pays close attention. His nest egg has grown significantly over the years, and the time he will need it draws closer every day.
Once, "The thought was 'My gosh, it will never grow to where it will ever be able to support me,' " he recalled. "But as I grew older and saw it grow, I thought, 'Now I need to really protect this.' "
As Americans increasingly link their well-being to financial markets, the possibility of recession and a slump on Wall Street has taken on new meaning for the middle class, including baby boomers who are approaching retirement age.
Some 50 million workers now participate in 401(k)-type savings plans, a number that has shot up since 2000 as employers increasingly stop offering traditional pensions.
Similarly, 46 million households hold a stake in the tax-advantaged savings plans known as individual retirement accounts, according to the Investment Company Institute.
The result is a historic linkage between the fortunes of the public and Wall Street, just as older baby boomers -- now past 60 -- focus more seriously on the living standards that await in their post-work years.
"You've been saving all these years," said Pamela Hess, director of retirement research at Hewitt Associates. "You've got quite a big nest egg, potentially. The stakes are just so much higher when you're that much closer to retirement."
The market has fallen hard in the last several months as the sub-prime mortgage crisis and credit crunch have threatened to send the economy into a tailspin.
The Dow Jones industrial average is down 11.9% from its all-time high last Oct. 9. The Nasdaq composite index has tumbled 17.5% from its recent peak and was briefly down more than 20% last week, the threshold generally considered to be a bear market.
