Q:

Why should you check your 401(k) balance?

A:

Quick Answer

Periodically checking a 401(k) balance better determines its performance, according to Geeks on Finance. The portfolio may need to be adjusted, and employees also need to know how their account managers are performing.

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Full Answer

An individual checks his 401(k) statements to see how his account performs, notes Geeks on Finance. Companies often send out monthly or quarterly statements. Account holders should learn how to read the information on their statements and keep up with copies of statements for their personal records. Keeping organized records makes it easier to track account performance and make adjustments as needed.

Websites are also used to check 401(k) accounts, according to Geeks on Finance. Users access their accounts, use analytical tools, get up-to-date news regarding the current state of the economy and learn more about available investment options. Another option is to call an automated service to receive an account balance or speak with an account manager.

Common mistakes people make with their 401(k)s include making too many changes, not saving enough and not making enough changes, notes U.S. News & World Report. Making too many changes to an account occurs when a person responds to the daily whims of the market, which often results in selling low and buying high.

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