Will another euro crisis send our savings on a wild summer ride?

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Even people with strong stomachs can get queasy after repeated roller coaster rides.

That’s essentially the financial situation Americans face for the second summer in a row, as looming debt crises in Europe threaten to put the markets — and Americans’ retirement savings — through more twists and turns.

It’s a sickeningly familiar prospect for those who saw the value of their 401(k) plans, Individual Retirement Accounts, college savings plans and other stock- and bond-based holdings plummet in the 2008 financial crisis and subsequent recession.

Those savers, understandably, might wonder if they should be jumping out of their current position and into something that feels less risky.

But the consensus among analysts is that, for most retirement savers, the prudent course is to sit tight.

“Retirement is the ultimate long-term proposition,” says Mike Alfred, cofounder and chief executive of BrightScope Inc., a San Diego-based financial information firm that analyzes 401(k) retirement plans. “So to me, managing your retirement account with short-term aspirations, or based on headlines, is a huge mistake.”

Over the past few years, Americans have expressed frustration and alarm as their best efforts to invest for retirement were undermined by political and financial events beyond their control.

Many who rode out the 2008 crisis and 2009-2010 recession had largely recouped their 401(k)’s lost value by mid-2011 — only to see the specter of bankruptcy in Greece send stocks diving again. In coming months, they may face more of the same.

After piling up debt that equaled more than one-and-a-half times its gross domestic product, Greece could not repay its loans in spring 2012. To buy the nation time to rebuild its economy, most of Greece’s private creditors wrote off debt or renegotiated loans, and the International Monetary Fund (IMF) and European Union (EU) loaned Greece money repeatedly through early 2012.

The loans were conditioned on Greece imposing drastic austerity measures, including tax increases and spending cuts — measures that have further undermined Greece’s frail economy and led to riots in the streets.

Voters rejected the austerity measures in a vote in May.

If Greek voters side with anti-austerity parties in new parliamentary elections in June, Greece may ask to renegotiate the loan terms — which the IMF and EU say they will not do.

Even if pro-austerity parties win and continue to try to meet the loan terms, Greece’s economy may continue to struggle and it may remain unable to pay debts.

Either scenario could result in Greece leaving the euro currency and not repaying loans to other nations. French banks hold the largest share of this debt, followed by banks in Germany, the United Kingdom and the United States.

Collectively, Americans have placed an estimated $4.3 trillion in 401(k) accounts, which are now the primary retirement savings vehicle in the nation. Those 401(k) dollars often are invested in money market and mutual funds, in portfolios with a mix of national and international holdings.

In the past year, many U.S. financial institutions have been scaling back their holdings in European banks that held debt from Greece and other countries whose economies are at risk, including Spain and Italy.

But many institutions — and thus many funds that hold 401(k) dollars — still are significantly invested there.

That can leave Americans with a panicky feeling that they should do something to limit their savings’ exposure, but not knowing just what.

Alfred suggests that if account holders don’t know how much of their savings might be in international funds or other funds that could be particularly affected by European developments, “they should sit down with a financial adviser who can go through their fund allocation with them."

Investors can review the allocations and discuss any potential adjustments to the strategy so the investor is comfortable with the level of risk, he says.

The last thing the saver should do, Alfred says, is scale back retirement savings.

A growing share of Americans’ 401(k) savings are invested in so-called target date retirement funds (TDFs). These funds automatically change the investment mix and asset allocation over time, with the goal of investing more conservatively as the saver’s anticipated retirement date nears.

An advisory from the U.S. Securities and Exchange Commission notes that TDFs “do not eliminate the need for you to decide, before investing and from time to time thereafter, whether the fund fits your financial situation.”

If people nearing retirement have their 401(k) plan in TDFs, those savings should already have been shifted into a mix of assets — for example, fewer stocks and more bonds — that would be less susceptible to crisis-driven market fluctuations.

How much a saver could be hurt by the coming months’ financial or political crises “all depends on how old they are,” says financial planner Erin Botsford. She is author of the 2012 book The Big Retirement Risk: Running Out of Money Before You Run Out of Time.

Botsford predicts that for the next 10 to 15 years in world markets, “we could see nothing but this up and down and up and down. So we need to reframe how people think about it, and we need to have two separate conversations” — one for near-term retirees and one for younger investors.

As the more than 77 million Americans in the baby boom generation head into retirement, they are changing “from net savers to net spenders,” Botsford says. Living off their nest egg, they can ill afford to have it diminished by market swings.

She suggests that those within a few years of retiring should “get ultra-ultra-conservative” in how their 401(k) dollars are allocated, choosing the option within their plan that would be least affected by market volatility.

For their outside savings, Botsford says, near-retirees “should focus on creating sustainable streams of income by investing in things like bonds, annuities, equipment leasing programs and Real Estate Investment Trusts (REITs),” a security that can be bought via stock exchanges and that invests in real estate.

Botsford notes that the same market swings that would be alarming to older investors would look very different to people like her son, who is 28 years old.

“If he understands the American and global economies and believes in their resilience, he can look at the downturns as opportunities to buy more shares at lower prices and build more wealth,” Botsford says.

Like Botsford, Alfred would counsel younger retirement account holders to take the long view.

“The problems of the world are always going to be there — if it’s not the Greece problem, it will be something else next week or next month or next year,” he says. “When it comes to your 401(k) plan, you should not read the news or worry about what’s happening in the world. You should simply continue to save as much as possible.”

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