If the S&P 500 dropped 20%, that's about a year's growth. Long-term investors who bought before that would be poorer than they thought they were, but they're not worse off than they started and there wouldn't be any particular bill to pay. If they're a long term investor then they can wait for it to come back. (A similar argument could be made for larger drops.)

The real suffering comes from whatever effect there is on the rest of the economy due to a recession, more layoffs, etc.

I always think 401k is not fair at all. It kinda forces one to invest and pump the stock prices.

If Alphabet can afford it why are they issuing $80B in new shares for fresh capital?