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In the Lifetime Planner Tool, what is the tax deferred savings 403(b) employee contribution limit?

It appears to still be using $10,500 which has not existed since the year 2001. The online help still states that limit. The 2020 limit is $19,500. The LPT also doesn't seem to support 50+ catch up contribution of $6,500. I've correctly entered the $26,000 total contributions in the assumptions, but the results incorrectly cap the contributions. Is there something I'm missing, or is there a workaround?

Best Answer

  • Scooterlam
    Scooterlam SuperUser ✭✭✭✭✭
    Accepted Answer
    @Boatnmaniac The link reference you made was to a LTP idea pertaining to updating RMD ages due to the Secure Act.

    Perhaps the link below is more appropriate to reference.  This contribution limit issue is longstanding and at one point, Quicken did make a change but I suspect to not all of the tax advantage accounts....And, perhaps the change that was made is now out of date....sigh....

    https://getsatisfaction.com/quickencommunity/topics/is-there-a-10-500-tax-defered-savings-limit-lifetime-planner-seems-to-revert-to-10-500-even-when-i

    @rmillercpa If I recall correctly,  the workaround is to create multiple contribution lines for a particular investment, each one below the 10,500 limit.  In your case you would have 3 contribution lines of 10.5k, 10.5k, 5k to sum to your 26K actual contribution.  In the past, this was my approach.   After adding these multiple contributions, have a look at your Plan Summary table for a given year to confirm.


Answers

  • Chris_QPW
    Chris_QPW Member ✭✭✭✭
    edited December 2020
    Where are you seeing this?

    As far as I know the Lifetime Planner knows nothing about such limits.
    Now the Tax Planner does, and is behind times for the new limits that "will go in place" (which means it isn't really behind times in my book) because changes this year.

    The Lifetime Planner doesn't even look at your paycheck.  It is simple entry of "how much income" and a percentage of what it will increase over time.

    Edit And the actual retirement account is just what it is today, and the future value is calculated using the return percentage.
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  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭
    edited December 2020
    Chris_QPW said:
    Where are you seeing this?

    As far as I know the Lifetime Planner knows nothing about such limits.
    Now the Tax Planner does, and is behind times for the new limits that "will go in place" (which means it isn't really behind times in my book) because changes this year.

    The Lifetime Planner doesn't even look at your paycheck.  It is simple entry of "how much income" and a percentage of what it will increase over time.

    Edit And the actual retirement account is just what it is today, and the future value is calculated using the return percentage.
    (Edit:  Corrected the link below....correction is is italics.)
    I didn't think Quicken would know anything about this limit, as well, but the online Help (https://help.quicken.com/display/WIN/Tell+me+how+the+Lifetime+Planner+uses+tax-deferred+savings+information) does state "401(k)s and 403(b)s are retirement accounts arranged by your employer. In the Lifetime Planner, even though you plan to save a percentage of your salary, you may see your savings remain constant as your salary increases. This occurs when you have reached a maximum contribution limit, such as the $10,500 limit on your 401(k) contributions (indexed for inflation)."  I'm not sure how that "(indexed for inflation)" is factored in with LTP but what is in online Help does seem to imply that either LTP needs to be updated or Help needs to be updated or both need to be updated. 
    @rmillerjrcpa - There is a product improvement idea thread for LTP (h ttps://community.quicken.com/discussion/7865450/update-lifetime-planner-to-reflect-changes-to-ira-handling-due-to-secure-act#latest https://community.quicken.com/discussion/comment/20088245#Comment_20088245) that you might want to review, add comment to and, if you agree with it, vote for by clicking on the up triangle in blue under the 1st post in the thread.  (This pic is not a pic of this particular Idea thread.  It's just shows how to vote for an idea and how to be kept updated on an idea.)


    The Quicken Team does pay attention to posted Ideas and the more people who vote for an idea the more likely the Team prioritize and implement it.  I've already referenced this post thread in that LTP improvement idea thread.

    (QW Premier Subscription: R32.12 on Windows 10)
  • Scooterlam
    Scooterlam SuperUser ✭✭✭✭✭
    Accepted Answer
    @Boatnmaniac The link reference you made was to a LTP idea pertaining to updating RMD ages due to the Secure Act.

    Perhaps the link below is more appropriate to reference.  This contribution limit issue is longstanding and at one point, Quicken did make a change but I suspect to not all of the tax advantage accounts....And, perhaps the change that was made is now out of date....sigh....

    https://getsatisfaction.com/quickencommunity/topics/is-there-a-10-500-tax-defered-savings-limit-lifetime-planner-seems-to-revert-to-10-500-even-when-i

    @rmillercpa If I recall correctly,  the workaround is to create multiple contribution lines for a particular investment, each one below the 10,500 limit.  In your case you would have 3 contribution lines of 10.5k, 10.5k, 5k to sum to your 26K actual contribution.  In the past, this was my approach.   After adding these multiple contributions, have a look at your Plan Summary table for a given year to confirm.


  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭
    edited December 2020
    @Boatnmaniac The link reference you made was to a LTP idea pertaining to updating RMD ages due to the Secure Act.

    Perhaps the link below is more appropriate to reference.  This contribution limit issue is longstanding and at one point, Quicken did make a change but I suspect to not all of the tax advantage accounts....And, perhaps the change that was made is now out of date....sigh....

    https://getsatisfaction.com/quickencommunity/topics/is-there-a-10-500-tax-defered-savings-limit-lifetime-planner-seems-to-revert-to-10-500-even-when-i
    Oops!  You are right.  I'd meant to reference your other LTP Idea thread (https://community.quicken.com/discussion/comment/20088245#Comment_20088245) where this contribution limit fit would be a better fit.  More specifically, to the link you referenced but which returns an error message.  Thanks for stepping in.  I've corrected the link in my original post.
    (QW Premier Subscription: R32.12 on Windows 10)
  • Scooterlam
    Scooterlam SuperUser ✭✭✭✭✭
    I understand that the GetSatisfaction redirects are still broken. Hopefully, that link I referenced will not continue to throw an error.
  • rmillerjrcpa
    rmillerjrcpa Member ✭✭
    Thanks @Scooterlam ! The workaround of multiple contribution entries worked. One side effect was it added the "employer contribute profit" % for each contribution entry even though I only included the setting on the first entry. The solution was to remove it from the employee contribution entries and add a separate entry last just for the "employer contribute profit %". Thanks for everyone's responses!
  • Chris_QPW
    Chris_QPW Member ✭✭✭✭
    The Lifetime Planner definitely has special rules for RMD, which with the new law are "sort of out of date" (not really if realize they have not finalized those rules), but that certainly isn't the contribution limits.

    One thing I will say about this is that I know that some of the Social Security bugs are fixed.  They are fixed because there was a long discussion on the fact that Quicken couldn't really make predictions on how much Social Security one would get because of the extremely complicated rules.  It was making assumptions based on the "typical use case".  So the end result was they took out those assumptions and just give a link to the Social Security website for the user to figure out what is right for them.

    I have no idea if a similar thing happened for the contribution limits on retirements accounts.  But no matter what the help says, I see nothing in the Lifetime Planner where they can enforce such limits because the amount that the user has contributed isn't an "input" into the Lifetime Planner.  It doesn't look at your paycheck or any category for your income, it is a fixed number that the user types in.


    And for the retirement account itself it uses the current balance of that account.
    Account bar:

    Planner (Dialog for Savings and investment, Investment tab):

    And the way it calculates the future value is on the Return tab of that dialog:
    Return:



    And also the tax planner doesn't do anything with this.
    I just tried putting a paycheck of 100,000 with a deduction of 50,000 and the result is just 50,000 of "Wages".  This goes for the "Taxable Income YTD" selectable on the on the Home tab, the W2 section in the Tax Schedule report.  As far as I know there isn't anything in Quicken that limits these contributions.
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This discussion has been closed.