Why Is There a Negative Cash Balance in My Investment Account

Casablanca

I have a 401(k) account with Alight Solutions that displays a negative number for the cash in the account. The account summary page at the FI website clearly shows a positive number for the mutual funds and the cash. However, QFM subtracts the cash from the account total and displays a balance for the mutual funds only. I've included a screen shot that shows the issue.

Frankx

Okay - so that is why you are having the issue in Quicken.  You apparently are not recording your paycheck properly in Quicken, because if you were, the Quicken 401(k) account would have the deposits going in as additions and then the downloaded transactions would offset those payroll entries (meaning you wouldn't need to delete them to get the 401(k) account in Q to balance).

Hope that makes sense, but if not get back to me.

Frankx

Frankx

Hi @Casablanca,

Is it possible that certain payroll related entries - specifically the recording of payroll transactions in Quicken where the payroll includes withholding of employee contributions made to the 401(k)?  From the information you provided, it appears that the downloads from Alight Solutions have indicated increases in value of investments in January & February which could be caused in part by purchases of securities.  In addition, the negative cash value could be caused by the payroll withholdings for those months have not been entered into Quicken.

Frankx

Casablanca

@Frankx...Thanks for the response! I'm not following your answer. When I entered my credentials for the FI, I expected QFM to download whatever the balance was at the time of the download. Please correct me if I'm wrong, but it sounds like you are saying that since QFM is missing some transactions, it can't provide an accurate balance. It is very confusing...

Frankx

Hi @Casablanca,

Sorry if I wasn't clear in how I phrased what was really a question. 

Because you presented a graphic from Quicken that showed a negative cash balance - and I know that 401k accounts can't have negative cash balances by law - that tells me that perhaps there are "deposit" transactions missing from the Quicken 401k account - which would likely originate from one of 3 sources: 1) they are payroll deductions from the employee's paycheck, or 2) they are "matching" or other contributions to the 401k account made by the employer, or 3) they are income deposits from investments in the plan (such as dividends).

So, yes - I am saying that Quicken seems to be missing some transactions and therefore the balance of the account in Quicken is therefore not accurate.

In order to move the discussion forward - can you tell me if the 401k account is an "active" account where the employee if currently making regular contributions to the plan, or if it is a "passive" account where the employee is either now retired or has elected not to make contributions currently?  

Frankx

NotACPA

Are you transferring cash from your paycheck into that 401k ... which is then used to buy the funds?

Or, otherwise moving cash into the account?

Casablanca

@Frankx I was able to correct the problem. The contributions from my paycheck were being treated as cash and subtracted from the balance. I had to "zero-out" the downloaded individual deposits to arrive a the correct balance. I may have to continue with this method in the future. I'll check back after my month-end contribution is made.

Frankx

Hi @Casablanca,

Let me ask a follow-up question that may help you actually get to the bottom of your problem.  Assuming that this 401k account is active (i.e. you are making regular contributions to it) are any other entries being made in the Quicken 401k account account register, other than the downloaded transactions from the plan administrator?

Frankx 

Casablanca

@Frankx Yes, the account is active with regular contributions twice-monthly. No other entires are made to the account.

Frankx

Okay - so that is why you are having the issue in Quicken.  You apparently are not recording your paycheck properly in Quicken, because if you were, the Quicken 401(k) account would have the deposits going in as additions and then the downloaded transactions would offset those payroll entries (meaning you wouldn't need to delete them to get the 401(k) account in Q to balance).

Hope that makes sense, but if not get back to me.

Frankx