Employer Contributions Towards Pension Plan

A1MB1G

How is everyone handling contributions made through payroll deductions? I have my paycheques setup as income reminders in Quicken. The deposits that go into my bank account are net of all deductions, income taxes and contributions made.

I've setup a new Registered investment account in Quicken and trying to figure out what the best way to enter the contributions are without making it too complicated or involving too many manual steps. Any ideas/suggestions would be appreciated.

Jim_Harman

One way to do this is to enter your paycheck as the gross amount and the deductions as splits, with retirement contributions entered as splits that transfer to the appropriate account(s). The net amount should match what is deposited to your checking account.

The Paycheck Wizard facilitates this. To set up a paycheck, go to Planning > Tax Center and click on Add Paycheck.

jr7107

No paycheck wizard here. Biweekly split transaction deposit/transfer directly into checking account/retirement accounts. Copy/paste transaction biweekly until something changes. Keeping it simple.

A1MB1G

> @jr7107 said:
> No paycheck wizard here. Biweekly split transaction deposit/transfer directly into checking account/retirement accounts. Copy/paste transaction biweekly until something changes. Keeping it simple.

Are you manually entering these every 2 weeks or is there a way to setup it up as an Income Reminder and applying the splits there? I tried setting up an Income Reminder but there was no way to initiate a split. Is there a way to enter a memorized transaction every 2 weeks?

Still getting a handle on Quicken again after years of being away.

jr7107

Yeah, when I started with Q there were no such wizards. So I would go into the register and manually create the deposit. Looking at an example I did this split transaction for a net deposit of $775:

Salary  1250
Fed Tax -100
State Tax -50
FICA -75
Retirement Savings -250 (setup as a transfer to retirement acct)
Employer Match 50 (category setup as Income)
Retirement Savings -50 (setup as transfer to retirement acct)

And then I copied/pasted it every two weeks. If it changed, made adjustments to the splits.

But another habit I got into (because budget features weren't really robust and difficult to get data into back in the day), I started using the checking account to budget for cash flow.

You start with your real time checking account balance. It then becomes two simple steps:

1. Pre-build income transactions into the ledger for the month
2. Pre-build expenses transactions for the month.

By pre-building transactions, you will have an idea of what the end of month cash flow will be. It certainly is not a perfect process, but it is a process to get that spending track right in front of you. It will keep your bank balance out of overdraft, and your bills paid on time. You may even notice there is a surplus to pad savings, or pay down additional debt.

Now I generally build out the checking account a full quarter in advance. All payments and deposits. I actually have it built it out now to 12/31. I strive for simplicity, using the registers over wizards every time.

A1MB1G

@jr7107 So, if I understand correctly, instead of using the built-in bill income and expense reminders as well as the budget tool, you're simply pre-entering all the transactions in your account register?

Any reason why you've chosen this process instead of using the built-in functions? I'm not asking to question your approach but more to get a better understanding of your way of doing things. Also, do you find pre-entering all of that into your account register bogs down the register where you see so many transactions that haven't even actually taken place yet and how do you filter that out when viewing the register?

The budget tool in Quicken leaves a lot to be desired. For some reason, even though I've checked off the box to include all my Bill Income & Expense reminders in my budget, none of them show up. Not sure if I'm using it wrong or not.

jr7107

@A1MB1G I chose the process for simplicity, reducing the amount of time spent budgeting. What I set was the Savings percentage goal. That really is the main budgeted item for me. Once that monthly goal was met, all other funds were for expenses. Making the singular Savings goal the main "expense" made it easier to budget given that any funds left over after expenses could be used to increase savings or reduce long term debt.

All of my checking account is then setup to show withdrawals for all of the monthly fixed expense, including savings and CC payments /transfers (no CC balance ever carries), mortgage/rent payments etc. As transactions filter in, the cash balance is updated and I get a solid picture of what the cash balance looks like at the end of the month. If a line item starts to "drain" the funds then the cash flow reports will always tell you where that expense is coming from, it is very easy to complete a month to month report on expenses.

As Super Users go I use a lot less functionality than the others. I really use Q heavily for the registers, tracking investments, and cash flow reporting. No tax planning, budgeting, debt plans, savings goals etc. ever enter my day to day. But that is my preference. It allows maximum information, with minimum amount of time on entry and administration. Keeping it as simple as Q can be.

Here is a very simple example that I put together. After a month like this, I would do a quick analysis and see the excess cash. Then I would build in the next month and estimate my cash flow to see if my Savings percentage could go higher, and sweep the excess cash into investments. Nothing to me is better than a real time picture of cash flow.



You can try a bunch of different methods, see what works for you. That's really the most important part that the process works for you.