This has to be a subjective answer because it varies per computer, application and person.   A good basic, and seemingly obvious, rule-of-thumb, is you upgrade when there is a legitimate need to do so, and just because there is an upgrade available is NOT a legitimate reason to upgrade.  That is partly because with computers, like old cars, if it's working don't screw with it -- or you find that it is now not working.  This rule applies to the OS (Operating System) also, i.e. unless you really need to upgrade to the new version, stay where you are, until you have a good reason to upgrade.

Some good reasons to upgrade are: 

• There is a problem with the current version of the SW
• The new version offers you options you need and want
• The new version is more secure than the present version
• You need to upgrade as the current version is no longer supported
• The SW is for HW and it is recommended by the HW vendor
  

There are of course more good reasons...

Before upgrading SW, or HW, backup your system disc and create a Restore Point in case you need to backout of the upgrade and it gets messy.

For more information on how to upgrade see the question:
What is the correct way to Install and Uninstall a program?