How often should you check your retirement account balance?

Truthfully, there is not a “right” answer to this question. But, I do have an opinion and will provide my thoughts here within this LinkedIn article.

How often one should check their account balance depends on a few things.

How close are you to your actual retirement age? Are you working with a professional? Do you know how often the Advisor is reviewing the portfolio? What is the goal of checking? Just to know? Or are you going to be tempted to reallocate? Who will “check your emotions” if you deicide to make quick decision?

If retirement age is 10 -15+ years away for you, checking your account balance is probably a good idea once a year or if you really want to keep an eye on it...once every 6 months.

If you realllyyyyyyy want to be aware of every move in the market…. Check it once a quarter.

I recently spoke with Dr. Daniel Crosby, who is a clinical Psychologist and Behavioral Finance Expert and he sighted Greg Davies' research on this…

“...If you check your account daily, you’ll experience a loss just over 41% of the time. Pretty scary when we consider that human nature makes losses feel about twice as bad as gains feel good. Look once every five years and you would have only experienced a loss about 12% of the time and those peeking every 12 years would never have seen a loss...”

Picture: Dr. Daniel Crosby and J. Cooper Simmerman, MBA on Episode 2 of Coffee with Connections. Watch the full interview here: Episode 2 #CoffeewithConnections

Now let me be clear….

I am referring to YOU as the retail investor..... Not necessarily your Asset Manager or Financial Planner. They may look at your account much more frequently as part of their planning and investment process. But that does not mean you need to as well!

Here are some events in which you may NEED to look at your account balance.

• Early on. Ensuring your allocation is properly set up
• When there is movement of money (rolling over 401ks, IRAs, conversions, etc.)
• Major life events: marriage, divorce, having a kid or building a financial plan
• Nearing actual retirement age

The reason is captured in the picture below

If you look at the chart on the right, it is very choppy! This may cause you to think something is wrong with your allocation or strategy. (Because you would be judging it based on a narrow time frame)... Causing you to reallocate or worse…. Sell at market bottom and then “get back in” when the market is climbing….

Zoom out.... (look at the long-term view) and you’ll likely see your account balance look more like the chart on the left. (Assuming you rebalance every so often, keep contributing, and DCA into the market).

The moral of the story… unless you are a professional day trader or have legit reason to peek at your accounts… Research shows you make better investment decisions by looking less and taking a long term POV.

Disclaimer: This was not financial advise. Educational use only. Please consult your own professional before making investment decisions. Not to be used to making financial decisions.