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People today are taking more of an interest in what they have and, for perhaps the first time, are planning. "That's what people today are doing differently. They are still concerned about how to pay for rising medical and college costs. Although they may not stop spending, they are spending a bit more carefully."

Edward Goldsberry, director of international tax services at PKF Texas, says there needs to be fundamental change in people's behavior toward saving money. Our national savings rate hovers around 15 percent, compared to 35 percent in other countries such as Japan. This is despite accessible savings vehicles such as 401(k)s and IRAs. This attitude will have to change because one of the leading sources of retirement income, Social Security, does not have enough current or anticipated revenues to meet the future needs of the system.

"The burden of saving falls on individuals," says Goldsberry. "I think many people say, 'I'm not going to count on Social Security to be there when I retire,' but they're not actively saving elsewhere."

Of his clients, Whatley says about 70 percent live beyond their means and are in a bind. They bought bigger houses and bigger cars than they could afford. "They've never had advice before. That's beginning to change and that's the opportunity for financial advisers," he says.

Some people are downsizing the size of their homes or refinancing debt to lower monthly payments. Others have sold their big expensive cars for less-expensive used cars. Some have realized that their children may have to work to help pay for college while others may choose to send their children to a state college versus a private university.

Many more parents and children are realizing the opportunities that enlisting in our nation's armed forces can provide for funding a college education.

What happened?

"We were seduced by 20 percent returns," says Whatley. "The stock market was overvalued, but we didn't bother to look at history to see that returns average about 10 percent to 12 percent for equities over the long haul. The people who are hurt the most by this are those who need the money in the short term."

Unfortunately, according to Whatley, those who are near retirement have been hardest hit. "As we get older, we tend to get more conservative. But I would argue that these are the people who need to be more aggressive about their investing. I'm not sure we've really learned what this market correction has told us. The question I ask a lot of clients now is 'Have you gotten too conservative?' "

Whatley's solution is to point out the factors that every client nearing retirement must consider:

• How much have I saved for health care costs?
• What is my life expectancy?
• Have I saved for long-term care costs?
• How much longer do I plan to work? Will I be forced out of work before I'm ready?

"You have to plan to live, not die," says Whatley. "We've been through the worst three years of the stock market since the 1930s. It's got to improve soon."

Lessons learned

So what did the economic boom and bust teach us as consumers? More than anything, we learned that long-term 20 percent returns were as unrealistic as some suggested during the golden years.

In fact, we now know that some of those returns were based on large companies inflating their financials. "Unfortunately, that practice was not isolated," says Goldsberry. "But what we've learned is how to better police that process and we've incorporated more integrity into the accounting system."

Many individuals have learned, some the hard way, that what goes up must come down. "When you have the opportunity to take profits, you need to do so," he says.

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