In the late 1990's, George Stewart used to eat at a table they called the million-dollar club. Mr. Stewart, now 61, was a machinist for Corning Inc., working the overnight shift for $18.32 an hour. But in his retirement account, composed entirely of Corning stock, he was a millionaire. In 2000, as the stock neared its peak, Mr. Stewart retired, moving his money into a secure bond fund. 

Gordon Casterline, six years younger than Mr. Stewart, never made it to the million-dollar table. When his retirement account, also in Corning stock, swelled to $500,000, he began planning to retire early, too. But in late 2000, the share price went into free fall, dropping to a dollar and change, from $113. "It wrenched my gut," Mr. Casterline said. "You had to sit there and watch it go down, down, down." 

Nowadays, he is still at work as a union executive, hoping to retire later this year, but with a much smaller nest egg than he had planned. 

Such stories abound in this company town, where loyalty, self-interest and faith in the company led many to bet their retirement portfolios almost exclusively on the stock of their employer. Economists said what happened here offered a pristine window on the mixed fortunes and stresses that come with retirement accounts based on company stock.

Nationally, about 25 percent of 401(k) assets are in workers' company stock, according to Hewitt Associates, a company that tracks the investment choices of 1.5 million 401(k) participants. Among employees with some company stock in their 401(k) accounts, 11.5 percent have almost nothing else, according to a study by Jack L. VanDerhei, a member of the Temple University business school faculty who studies employee benefits.

While news stories have focused on employees of companies like Enron and Adelphia, who lost their retirement dreams because of executive mismanagement or corruption, workers at name-brand companies like Polaroid, Lucent, Procter & Gamble and Corning have also gone through wild ups and downs related to the vagaries of business. Corning stock plunged when telecommunications companies, the customers for Corning's fiber optic cables, suffered setbacks.

This town of 11,000 in the Finger Lakes region of western New York is intimately tied to the company named after it, which at its peak employed 8,300 people in the area. People here speak of modest dreams that came and went with the boom: a chance to pay for a family vacation, to help with their grandchildren's education or just to retire early.

During the stock's descent, a downtown bar noted that if you had $1,000, you were better off investing it in beer and redeeming the deposit on the cans than buying Corning stock. 

As more companies have shifted from traditional pensions to retirement investment plans, or 401(k) accounts, many workers find themselves trying to time their retirements to the volatile fortunes of a single company stock. Often workers have little preparation for this decision. 

"It's hard to figure when enough is enough," said Thomas Cosgrove, 61, a Corning sheet-metal worker who retired and moved his money into another fund well before the company's stock hit its peak. Some of his friends hung on longer and made fortunes; some held on still longer and lost it all. "I wish I'd had an economic background," Mr. Cosgrove said. "I might have done things differently."

At many companies - including, until recently, Corning - employees under 55 are limited in their ability to convert company stock unless they retire early, sacrificing other retirement benefits. "Companies say they want employees to have a vested interest in the company doing well," Mr. VanDerhei said. "A lot of employees say, 'If it's good enough for the employer to match, it's good enough for me.' "

But this exposes them to unpredictable risk, as any single stock can swing precipitously, even when the market is stable. "Company stock is one of the most serious problems that hasn't gotten the attention it deserves," said Alicia Munnell, director of the Center for Retirement Research at Boston College. "It's so imprudent to have your investments in the same spot as your human capital." 

Mr. Stewart now works part time in an engine repair shop, just to keep busy. He said most of his peers at the million-dollar table sold their Corning stock before its decline. "It never felt real," he said. "My grandkids used to call me The Millionaire." These days, he said, he feels fortunate that time was on his side. "The younger guys say, 'All you old guys got out at the right time.' "

Mr. Casterline was one of the younger guys. "I thought I could pay off my daughter's student loans," he said. "I saw things like that dwindle. I don't ever expect to have $500,000 in there again." 

Like many companies with 401(k) plans, Corning allows employees to choose among several funds, one of which is company stock. The company then matches all or part of the employee's contribution with Corning stock. Employees also receive a traditional pension.

In the late 1990's, as Corning's business shifted from consumer products to fiber optics, business boomed. Its stock price rose 1,000 percent in two years. The boutiques on Market Street here started flaunting luxury goods; the hills around town bustled with new home construction.

"Suddenly we had more millionaires than any town in the country," said Donald Morton, 60, who runs a group of Corning union retirees. "This is a factory town. We never thought we were going to have any money. Everyone started to joke, 'Now I'm a millionaire, watch how you talk to me.' " 

Mr. Casterline and Mr. Stewart had never bought stock before joining the 401(k) plan when it was first offered in 1989. Both invested exclusively in Corning stock because they had faith in the company, they said. Even when the stock went down, caught in the meltdown in the telecommunications industry, Mr. Casterline said: "I said, 'I've got 30 years in this company. I know it's coming back.' " 

This confidence, which echoes throughout the town, is a common factor leading employees to choose company stock, economists say. After Enron's collapse, in which top executives urged employees to buy more stock even as the executives sold their own, Senators Jon Corzine and Barbara Boxer, among others, proposed legislation to give employees more freedom to move funds out of company stock. So far none has passed, though many companies, including Corning, have made it easier for employees to move their investments to other funds. 

But Ms. Munnell of Boston College said such legislation would likely have little effect, because people do not want to shed their company stock. 
"People see the higher-paid executives getting rich," she said. "There's an endorsement effect. Even if the employer doesn't say, 'You should buy,' they see the employer putting an investment in the stock, so they think it must be a good idea." 

Roberta Andrews, 58, who joined the company in 1972 and worked in inventory control, said she put her 401(k) mostly in Corning stock even though a financial planner at the credit union advised her to diversify. 

While helping her 10-year-old grandson with his math homework, she described the elation that swept the town after the stock started to levitate in September 1998. "It was beautiful," she said. "We were all rich. Everyone was watching every day on the computer. Then they'd check again at lunch." By the autumn of 2000, Ms. Andrews said, she was worth about $750,000. "But I never went wild with spending," she said. "The most I did was buy curtains." 
When the stock started to fall, she lost interest in watching the computer, she said. She retired in 2001 and kept most of her assets in Corning stock, which hit bottom in 2002, but has recently climbed back to about one-tenth of its peak. She now lives off her pension. 

William B. Burns, a financial planner in town, said that even clients who diversified were hit by the ripples of Corning's stock decline. With the combination of new construction and layoffs at the company, real estate values dropped sharply. 

"There were a lot of vacant homes in the area," Mr. Burns said. "Our clients had done everything right, and now they wanted to move, but they couldn't sell their homes." 

Even among those who got out early, the rise and fall of company stock has left some questions and regrets. Judith Ratcliffe, a business manager at Corning and then at World Kitchen, the company that bought Corning's housewares division, spread her 401(k) in different funds, but still lost $400,000 on Corning stock. "It was one hell of a ride," said Ms. Ratcliffe, who retired this year, at 57, despite her losses.

"At the end of the day, what are you going to do?" she asked. "You can't pretend it didn't happen. 
"It gives a whole bunch of people something to talk about. Now people know what it means to lose it all. But I haven't detected any bitterness." She spoke of her own fortunes almost like she might discuss a fluke weather pattern, from which no precautions could avert all damage. "I probably wouldn't have done anything different," she said. "You learn and you move on."