By most accounts, those in or near retirement took the biggest hit from the bear market in 2008 and early 2009. When you take a step back, though, younger investors are in much greater danger of failing to reach their financial goals -- and their prospects for the future are anything but certain.

A lifetime of investing
You'd expect that when comparing the impact of falling financial markets on various groups of investors, those who owned the most assets would have seen the worst results. Younger investors, most of whom haven't been on the job long enough to accumulate a lot of wealth, didn't have much to lose during the bear market. In contrast, retirees have all the money they'll ever have saved up in their nest eggs, but they tend to invest more conservatively -- a practice that protected them from the worst of the damage.

Those stuck in the middle, though -- investors close to retirement, but not yet there -- seem like the natural target. They have plenty of assets to lose, yet many still invest fairly aggressively in an effort to make that last push toward retirement.

As it turns out, those suspicions are correct, at least on their face. The Center for Retirement Research at Boston College recently examined the experiences of investors of different ages. In raw dollar losses, no group of investors did worse than those about to retire. In particular, the study found that those aged 55-64 lost roughly $1 trillion in the market meltdown, when you consider both IRAs and employer 401(k) accounts.

Those numbers reflect how things looked in March 2009. Since then, the recovery in stocks has boosted many of those accounts well back toward their former levels.

Charmed lives?
What's more interesting, though, is the overall experience that various investors have had throughout the course of their lives. The study takes a look at the internal rates of return that investors of various ages have earned, based on the timing and amounts they invested. Although the oldest members of the baby boom generation got hurt the most over the past two years, they've actually enjoyed relatively strong returns on their lifetime investments -- about 9% annually.

In contrast, younger investors haven't done nearly as well. "Late" boomers -- those born around 1960 -- have only earned between 5% and 7%, depending on their mix of investments. Generation X investors who had all of their money in stocks have just barely broken even.

When you consider all the bull markets that older investors have seen during their lives, those return disparities make sense. During the 1980s, the stock market boomed out of a long recession, with stocks like IBM (NYSE: IBM), Procter & Gamble (NYSE: PG), and ExxonMobil (NYSE: XOM) all posting multibagger gains despite the short-lived effects of the 1987 stock market crash.

Then, by the 1990s, many of today's near-retirees had more than enough money set aside to take full advantage of the bull market in tech stocks. Returns of 5,000% or more from stocks including Microsoft (Nasdaq: MSFT), Dell (Nasdaq: DELL), and Intel (Nasdaq: INTC) were more than enough to offset losses from investing in riskier ventures.

Meanwhile, those who came along later arrived just in time to see those trends reverse themselves. Many tech stocks flamed out, and although growth leaders like Apple (Nasdaq: AAPL) put up impressive numbers during the past decade, the bull market from 2003 to 2007 merely gave most investors a chance to buy high in advance of the most recent collapse.

What's to come
In order to make up for lost time, younger investors have to hope that future returns are high enough to bring them the results they want. Yet many are warning investors not to expect the returns that the past several decades have brought to today's near-retirees. Although the terrible performance over the past 10 years has many believing that the worst is over for the market, you can't count on stocks reverting to the mean with a decade of strong outperformance.

As unfair as it may seem, there's nothing that says that you're entitled to those historical 10% returns on stocks going forward. The best financial plans make allowances for the possibility that future returns will be more modest than what we've seen in the past. If things turn out brighter than that, it can then be merely a pleasant surprise, rather than something you're counting on. That's the best way for younger investors to avoid becoming ongoing victims of 1998's market meltdown.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.