For baby boomers, it's got to feel like the worst kind of d j vu. Last week's startling slide is just the latest dose of volatility to puncture their portfolios; not as wild as the 2008 crash -- at least not yet -- but just as sudden and unsettling. And it comes at a time when investors' 401(k) balances, on average, had only just returned to their pre-crash levels. If the correction endures, advisers say, it'll be particularly tough for those who are close to retiring, or just recently did so.

"It's very unfair for boomers," says Ray Harrison, who heads up wealth advisory firm Harrison Financial Group in Roseville, Calif., which manages $240 million. Unlike investors under age 50 who still have plenty of time to build up their savings, he explains, boomers in their late 50s and 60s have relatively little time to adjust to losses. "Those that just retired wow, they're hurting," says Harrison. To prove it, SmartMoney asked the nonprofit Employee Benefit Research Institute to estimate what would happen to future retirees if bonds were to stay at their current, low yields, while equities rose at 6% a year, a more modest rate than historical averages. They found that 56% of late boomers, those approaching retirement age today, would be at risk of running short of money in retirement.

Some advisers who work with boomers think that the psychological toll of the market volatility has become as severe as the financial toll for that demographic. Steven Feys, a Poolesville, Md., adviser who oversees about $75 million, says that while his older clients, who can recall bad times like the stagflation of the 1970s, tend to take the long view and expect better times down the road, his boomers are more skeptical; after all, once you factor in the tech crash, in some cases "the market has been down half the time that they've been investing." For exactly that reason, Feys has been conservative over the past several weeks, moving his clients into cash.

Another option for gun-shy boomers who are near retirement, say experts, is buying an income-generating fixed annuity, which allows investors to turn over a lump sum in exchanged for guaranteed income payments. Those annuities have drawbacks, however: because interest rates are low, the annuity payout rates are not especially generous right now, advisers say; and it's often expensive or even impossible for customers to cash out of fixed annuities if they change their minds. For those and other reasons, investors should look to put a relatively small portion -- roughly 10% -- of their portfolio in an income annuity, says Drew Denning, vice president of retiree services at Principal Financial Group.

Of course, some bolder advisers continue to see the correction as a buying opportunity, urging boomer clients to confront their fears and seize the opportunity to pick up, say, retiree-friendly dividend paying stocks on the cheap. As for those who hoped to retire within the next, say, 12 to 18 months? To quote a research note published last week by T. Rowe Price, "they already should be invested in cash or relatively stable investments." Here's hoping they made that move before Thursday's 500-point drop.

Additional reporting by Alyssa Abkowitz.