43% of Retirement Savers Check Their Account Balances More Than 3 Times a Week. Here’s Why That’s a Huge Mistake

The past 12 months have hardly been kind to retirement savers. Since the start of 2022, many people have seen their IRA or 401(k) balances drop.

In fact, Fidelity reports that the average 401(k) plan balance is down almost 23% from a year ago, while the average IRA balance is down almost 25%. And a big reason has to do with recent stock market volatility.

Meanwhile, data from Nationwide reveals that many investors are terrified about their financial future in light of this year’s stock market events. And 43% of savers say they’ve been checking their retirement plan balances more than three times a week to keep tabs on how they’re faring.

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The latter, however, is extremely problematic. And if you’ve been peeking at your IRA or 401(k) plan balance weekly, it’s time to put an end to that practice.

Too much vigilance could backfire on you

As a general rule, it’s a good idea to check up on your retirement savings once a quarter. Not only should you look at your balance, but you should also look at your assets to make sure they’re allocated appropriately for your age and are nice and diverse.

But there’s a big difference between doing a quarterly IRA or 401(k) checkup versus glancing at your balance every other day. If you go the latter route, you may be more likely to make rash decisions, like selling off investments when they’re down and locking in permanent losses that could really throw off your long-term plans.

That’s why checking your retirement multiple times a week is not advisable — period. Not only might it cause you to lose money, but frankly, it’s not good for your mental health at a time when the stock market is nothing but turbulent.

In fact, even under strong market conditions, it’s still not a good idea to check your retirement plan balance all the time. Market conditions can change on a whim, and there’s no sense in getting hung up on specific numbers when they’re not set in stone.

Think ahead

It may be upsetting to see that your IRA or 401(k) has lost money this year. But if that’s the case, first, know that you’re not alone. And second, if retirement is a decade or more away, then there’s really no need to panic, as that gives you a lot of time for your portfolio value to recover.

Now if retirement is right around the corner and your IRA or 401(k) has lost around 25% of its value in the past year, you may need to rethink your plans to wrap up your career. You might also need to rethink your approach to investing your IRA or 401(k), since your goal should be to shield yourself from extreme losses when retirement is near.

But even in that scenario — where retirement is coming right up — checking your savings balance multiple times a week just isn’t going to do you any good. So rather than doing that, you may want to spend that time productively, like researching different assets to see if there’s a new investment that may be a good fit for your portfolio.

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