It still mostly worked fine? In 2001-2002, S&P500 was still higher than it had been for all but 5 of the last 40 years (after adjusting for inflation). So it was far more effective than hoarding cash. 2008-2009 was slightly worse, but the same idea still applies.

The transition away from pension plans leaving people unprepared for retirement was probably a much bigger issue than the state of the stock market at retirement.