Oct. 12--Carolyn Lawrence figures she lost so much from her retirement fund in recent weeks that she'll need to work at least three years more just to cover the difference.

Lawrence, who's 62, retired two years ago.

Concerns about the economy and the preservation of her life savings have disrupted her plans. She's putting the sale of her house on hold, has taken up a part-time job and is cutting back on her lifestyle to accommodate the collapse of Wall Street.

Watching retirement plans lately has been like witnessing a house fire: The closer you are, the more horrific the spectacle.

September retirement account statements are reflecting a collective destruction of $1.6 trillion or 18% of value since September 2007, according to an Urban Institute report released last week. That doesn't even include fallout from the early October meltdown, with the Dow Jones industrial average sinking 22% through Friday.

The impact is harshest on those in or near retirement. According to the Urban Institute's Retirement Policy Program, the median retirement account for the 94 million Americans 50 and older is down to about $89,000, wiping out nearly all the gains made in the two previous years.

Lawrence retired as a customer service supervisor from We Energies, where she had worked for 32 years. She had hoped to travel, spend time with her grandchildren, sell her Milwaukee bungalow and move into the duplex she rents to her daughter.

She did manage to take a 35-day tour of the South Pacific last year, but when she returned, she was greeted by talk of recession, which upset her plans.

"I just didn't feel comfortable," Lawrence said.

She mothballed plans to sell her house after a real estate agent valued it at about half of what Lawrence was counting on. She has drastically cut back on her shopping trips to resale shops. She isn't planning any trips. She treats herself to just one half-decaf Starbucks latte a week.

And like a growing number of retirees, Lawrence is back at work -- a part-time job that helps her cover the mortgage and utilities and minimizes her need to dip into her retirement savings.

"I'm just kind of making it," Lawrence said. But if her car breaks down or her furnace goes out, she says, it'll be another story.

Recovery time

"It's been a challenging time for a lot of people," said Mark Zalewski, vice president for private wealth management at Milwaukee's Robert W. Baird & Co.