How to Track Your Pension's Performance

FUTURE PROOF: Use Morningstar tools to track the performance of your retirement portfolio and ensure you are on course for a healthy income from your pension

Adam Zoll 20 February, 2015 | 12:20PM
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Anyone who has ever been lost while traveling in an unfamiliar city or foreign country knows how disconcerting it can be. The same thing goes for retirement saving. While you probably have some idea where you want to end up in terms of a retirement lifestyle, you may not have a good idea of whether you're on track to get there.

Perhaps you've already taken the first steps, determining how much you already have saved up and whether your savings rate is sufficient. Next come decisions about how you want your retirement portfolio to look, in other words, its asset allocation and investment selection. But once these tasks are done, your job still isn't finished. You'll need to monitor your portfolio's performance over time to make sure you stay on track. But what's the best way to do this?  

Of course, you could always take the lazy way out--opening up your pension statements every three months, glancing at the total value of your holdings and comparing it with the quarter before. If the number is higher, you conclude things are going well, and if they're lower, you conclude they are not. But all that's going to tell you is whether your portfolio is heading in the right direction. And if you are still contributing to the account, that growth in asset size may be more attributable to new money you've added than to good investment performance.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Adam Zoll  is an assistant site editor with Morningstar.com, the sister site of Morningstar.co.uk.