That's particularly so if they had intended to buy an annuity with their RRSP holdings. For them, current conditions are doubly bad: Not only do they have a diminished portfolio with which to buy the annuity, but interest rates are near 40-year lows.

"Locking into an annuity at today's interest rates for the rest of your life is an easy decision to avoid," says David Christianson, senior adviser at Winnipeg-based Wellington West Total Wealth Management Inc., a fee-only financial-planning firm.

In contrast, he and many other financial advisers see the registered retirement income fund (RRIF), which allows owners to keep the same investments held inside their RRSPs, as a stronger alternative.

"Ideally, the change from an RRSP to a RRIF should be pretty seamless," Mr. Christianson says.

"You simply change the name of the plan and make sure you've got bonds maturing at the time you need to withdraw some money."

Moreover, the annuity decision can always be revisited later. Someone who chooses to roll an RRSP into a RRIF at 69 can still buy an annuity later if interest rates increase, says Cherith Cayford, a financial and retirement adviser with Camelot Management Group Inc. in Qualicum Beach, B. C.

The reality, however, is that many seniors don't want to ride out any more economic storms.

"I've met a lot of people who, as they get older, just reach a point where they don't want to be troubled with [financial] anxiety. They want things much more in black and white and are prepared to accept a lower rate of return to have that peace of mind," Ms. Cayford says.

Notwithstanding the recent uncertainty, Warren Baldwin, regional vice-president in the Toronto office of TE Financial Consultants Ltd., a fee-only financial-advisory firm, believes that making wholesale changes to overweight an RRSP portfolio with conservative investments would be a major mistake.

"I understand equity markets have been a little too volatile for some people over the past 16 months," he says.

"But the fact is that over the long term, a certain exposure to the equity markets is almost a requirement -- particularly where interest rates are these days. When prevailing rates are in the 3- to 5-per-cent range and inflation is running in the 2-per-cent range, it's tough to get ahead," he says.

Seniors who want to shelter themselves from market volatility should consider swapping some equities for fixed-income assets, financial analysts suggest. This way, they can avoid the prospect of locking into an irrevocable annuity contract at low interest and still enjoy additional security within their RRSP and later the RRIF.

One way of doing this, says Dan Bodanis, a senior financial adviser with KingsGate Wealth Management Services Ltd. in Toronto, is to replace some of the equities with short-term-bond funds, staggering maturity dates over periods, such as five and 10 years, to protect against low interest rates.

Doing this through a mutual fund lets investors get a diverse mix of bonds they might not otherwise be able to afford. But, warns Mr. Baldwin, the annual management expense ratio for a bond fund can be "horribly expensive" -- averaging about 1.9 per cent annually, which cuts into returns.

Individuals who don't want a bond fund can still get the benefits of diversified maturity dates with individual bonds by using a "laddered" strategy of staggered maturity dates, says Gena Katz, a principal with Ernst & Young in Toronto. "That's always a prudent strategy with fixed-income instruments. As rates increase, you can take advantage of the situation because you'll likely have something maturing at that time," she says.

The same principle of staggered maturity dates for purposes of interest-rate hedging can be applied to guaranteed investment certificates and other investments inside the RRSP portfolio.

Financial analysts quickly point out that planning ahead is the best way for seniors to avoid getting trapped by bad market conditions. For a person approaching retirement, a variety of investments designed to weather any economic storm is still the best long-term strategy, they stress.

"Normally, at least three years before somebody is due to roll an RRSP into a RRIF, we start looking at their investments and making the necessary adjustments, depending on the type of investor -- whether they are, for instance, looking for safety or more growth, in order to maintain an appropriate portfolio," says Daniel Sacke, an investment adviser with BMO Nesbitt Burns in Toronto.

Mr. Christianson of Wellington West holds a similar view.

"Bull markets and bear markets shouldn't matter. Anybody who's thinking they need to make a lifetime decision with an instrument such as an annuity based on six months of market returns is setting up for failure. Some number of years before they turn 69, investors are hopefully assessing both the asset mix they've got and their comfort level with it, and thinking ahead to the decision they're going to make," he says.

That's exactly what Ken Dick is doing.

The 62-year old chartered accountant, who lives in Oakville, Ont., is planning one more major change to his RRSP portfolio, after which it will consist of about 55 per cent equities, 40 per cent fixed-income investments and 5-per-cent cash. He then plans to leave it more or less that way over the next seven years, regardless of how the market performs, before likely opting for an annuity.

"I try to keep my portfolio balanced. Whether it goes up or down, I can roll with that, [because] looking down the road, I can see about so much in the pot when it comes time to terminate the plan. And I want that amount guaranteed," he says.

Many of the people in trouble today, insist analysts, are those who shrugged off such a prudent mix of equities and fixed-income assets during the bull market run of the late 1990s.

They became over-exuberant about their equity holdings when the markets rose, forgot about diversifying, and thus bore a disproportionate share of the subsequent market decline.

"Some individuals got carried away with the moment and all the hype that was going around," says Ms. Cayford of Camelot Management Group.

"At some of the workshops and seminars I put on today, I speak to people who failed to diversify their portfolios when they were close to retirement. They had all their eggs in one basket and are now facing much reduced prospects."