While the market may have recovered significantly in the second half of the year, many investors’ portfolios are back to 1999 levels, resulting in a “lost decade” of investing, AARP Financial said.

Indeed, an AARP survey found that 65% of investors lack confidence in the financial markets and consider the markets’ performance to be the biggest threat to their retirement. Fifty-five percent said it’s hard to find financial information and guidance they can trust.

“A lot of damage has been done across income segments—to investor portfolios and psyches alike,” said AARP Financial President Richard “Mac” Hisey. “The recent market recovery notwithstanding, millions of Americans are still scared and confused about their retirement plans. Many others should be concerned but aren’t because they are unaware of how unprepared they are.

“The reality is that, financially speaking, we are emerging from a ‘lost decade.’ There are distinct similarities between this lost decade and the classic novel and film, ‘The Lost Weekend,’ which depicts an alcoholic’s struggle with blackouts and binge drinking,” Hisey continued. “It can be argued that it was a combination of Wall Street’s own risk-taking and extreme over-leveraging [coupled with] individuals spending way beyond their means, using their homes as ATMs and borrowing to consume, and the federal government keeping interest rates too low for too long that contributed to a binge that ultimately led to a credit crisis and the worst recession since the Great Depression.”

To address this situation, AARP Financial has developed a guide called, “The Road Back: Eight Steps Toward Financial Recovery.”

The steps include being realistic about one’s age span, assets and liabilities, inflation and lifestyle in retirement. AARP suggests people consider moving to a more affordable section of the country, possibly working longer and definitely saving as much as they possible can, starting with a qualified retirement plan. Invest regularly, AARP says, take advantage of dollar-cost averaging and pay attention to fees and transaction costs.

AARP suggests that people consider both life insurance and long-term care insurance. And despite the market’s turbulence and the recent questioning of the wisdom of traditional asset allocation, AARP recommends a properly diversified portfolio overseen by a trusted  financial professional.

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