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Monitoring Your Account

Once you've set your personal investment strategy in motion, several tools will help you keep track of your accounts. Your account statements tell you exactly where you stand.

Here are a couple of things you may want to watch for:

  • Your savings (or deferral) levels for various accounts. Are you saving enough to meet your retirement goal? If you're saving less than the allowed maximum in your employer-sponsored plan, consider gradually increasing the percentage you're saving at the end of each year or when you get a raise. The IRS will limit you to $14,000 in before-tax contributions in an employer-sponsored retirement savings plan (2005). If you are age 50 or older, you may contribute an additional $4,000. Maximums vary for other types of Individual Retirement Accounts (IRAs); talk with your tax advisor about the specifics. Some limits are subject to change with inflation and are established annually by the IRS.
  • Fund balances. You can monitor your account balances using your regular statements. It is important to maintain your target asset allocation.

What should you do if you see low returns in any quarter? Probably nothing. Your more volatile investments will vary in returns, sometimes dramatically, quarter to quarter and even year to year. When a particular type of investment is returning less than its long-term average, it may help to think of it as increasing your purchasing power. When the market is down, you typically buy more shares for your money. However, this doesn't ensure a profit nor does it protect against loss in a declining market.

Market Timing  Worksheet