Stocks are critical to retirement savings

Golden egg and money in a nest

Wall Street has been incredibly volatile this year, and investing most of your 401(k) plan or Individual Retirement Account in stocks won't guarantee a comfortable retirement.

But putting your retirement savings in any other type of investment makes it virtually impossible to accumulate enough wealth to replace 60% to 80% of your preretirement income after you leave the workplace.

Most savers need an average return of 7% or 8% a year to have a shot at that, and stocks are the only type of investment that's posted such lucrative returns over an extended period.

Playing it safe by putting your money in certificates of deposit or money market accounts that pay 1% or 2% a year won't cut it.

And the sooner you get started, the better your chance of succeeding.

The first $100,000 takes the longest to save, and the biggest returns will come in a rush near the end of your working life.

Think about it this way: An 8% gain on $50,000 is only $4,000, but an 8% gain on $300,000 is $24,000.

Our 12 new rules of retirement savings can help build a bigger, better nest egg.

Or use our retirement calculator to figure out how much you'll need to retire comfortably with a reasonable monthly income.

It will also determine how much you need to save each month between now and when you stop working to achieve your goals. You can include Social Security or not. It's up to you.

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