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Tracking 401(k) and Roth 401(k) together

harris48154

My employer lumps the 401(k) and the Roth 401(k) transactions together and they download together making it quite difficult to track separately. The only way that I can see to mark the Roth transactions to differentiate them is with Memo. The problem there is, I can see no way to report portfolio value or performance with transactions sorted by Memo.
Seems to me there must be a way to do this. I'm hoping someone can give me a suggestion.

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Accepted answers

Chris_QPW

harris48154 said:

A couple of people have mentioned using Tags to identify which transactions are pre-tax and which are Roth. I am using Quicken Premier 2020. In it I am not able to see how to add Tags to investment transactions.
Am I missing something or is that functionality that doesn't exist in my version?

There isn't a separate text box for tags in an investment transaction, but you can enter them in the category text box using the syntax:
category/tag

Sherlock

Any transaction entries that have a category may have also have tags. After the category enter a forward slash (/) then the tags separated by colons (:).

All comments

Sherlock

Please provide the full name of the financial institution and the connection method being used: open the register, press Ctrl + Shift + E and select the Online Services tab.

harris48154

I think, perhaps, I didn't make the difficulty clear. I do not have a problem downloading the transactions. (Alight via Direct Connect) The problem is that all transactions, 401(k) and Roth 401(k) are all lumped together. I don't mind going in after the download and manually identifying which transactions are which.
My problem is, how do I mark them so that I can report the Roth performance and value separate from the standard 401(k)?

Jim_Harman

I have the same problem as @harris48154 - the FI, T Rowe Price in my case, combines regular and Roth 401(k) holdings together in one account and there is no way to break these out in Quicken.

Quicken does track several categories of "cash source" for the account, including Employee Contribution and Employer Match. Unfortunately Roth is not one of the categories, and there is no way in Quicken to break out the categories for reporting purposes.

If this is a former employer and especially when you start taking distributions from the 401(k), you will probably want to roll it over into separate traditional and Roth IRAs. Then you will be able to choose investments and track the performance separately, and take RMDs just from the traditional side

J_Mike

Given the situation described by the OP, I would use Tags to identify the contributions; e.g., "AT" for employee after-tax contributions and "PT" for employer pre-tax contributions.

I am assuming that the contributions are co-mingled and then invested in the same damply of mutual funds. Thus the performance of the total account defines the performance of both the AT and PT portions ; i.e., there is no difference in performance between the AT and PT portions.

At any point in time, one can run a report showing the cumulative totals of AT & PT contributions. The total value of the AT portion of the account is simply the ratio of AT/(AT + PT) multiplied by the total value the account. Similarly for the total value of the PT portion.

Am I over-simplifying things ???

harris48154

J_Mike, that sounds like an approach toward what I wish to accomplish. Perhaps I'm missing something that should be apparent, but how can I add a Tag to an investment transaction? Further, I don't see any way to use a Tag as a selection criteria for a Portfolio Value report. Perhaps you could clarify for me?

Jim_Harman

@J_Mike in my 401(k) at least you can choose whether your contributions are normal or Roth and you can pick the investments for them. The company match is always normal and you can pick the investments separately for that.

Tags would keep track of contributions, but not the securities they are invested in and would not help track the balance or performance of the Roth portion of the account separately.

q_lurker

Given @Jim_Harman's explanation, I can't imagine trying to track this in anything but two separate Quicken accounts. That the FI does not download that way --- well sometimes it is easier to do things manually rather than force-fit badly structured download information - round hole / square peg problem.

One could still do things like download and move (or cut and paste) transactions and have paycheck contribution deposited to the two different accounts. Where it would get messy is if the FI says XYZ paid $100 in dividends and that is somehow partly Roth and partly traditional.

I continue to hold forth that doing Quicken financial things manually can provide a better understanding of the real world finances as compared to trusting a black-box to do everything correctly.

My 2 cents.

Gilley7997

I can see how this messes with the Lifetime Planner, but I have basically come to the conclusion that I don't have a nice way to track this, as the details just aren't there from the 401k provider as to what portion is Roth and what isn't when it comes to dividends, and fees and they like. I have basically just come to the conclusion that for now I'm going to track the balance and later in life (much much later) When I quit the job, I will roll the money out of the 401k most likely and it will end up in 2 separate accounts with the proper tax accounting. Until then. I'm just going to live with it and pull the separate balances from the FI for planning discussions.

Fozz

Glad I found this thread as I've been beating my head against the wall since 1/15 when my wife switched from contributing to a regular to a Roth 401k. I'm waiting until I get the first quarter statement to see if the FS (small, local, underwhelming) distinguishes regular vs. Roth earned investment dollars. Can anyone share how/if your FS manages this distinction?

Following......

NotACPA

What's an FS? Do you mean FI (financial institution).

Fozz

My mistake, FI, not FS

harris48154

A couple of people have mentioned using Tags to identify which transactions are pre-tax and which are Roth. I am using Quicken Premier 2020. In it I am not able to see how to add Tags to investment transactions.
Am I missing something or is that functionality that doesn't exist in my version?

Chris_QPW

harris48154 said:

A couple of people have mentioned using Tags to identify which transactions are pre-tax and which are Roth. I am using Quicken Premier 2020. In it I am not able to see how to add Tags to investment transactions.
Am I missing something or is that functionality that doesn't exist in my version?

There isn't a separate text box for tags in an investment transaction, but you can enter them in the category text box using the syntax:
category/tag

Sherlock

Any transaction entries that have a category may have also have tags. After the category enter a forward slash (/) then the tags separated by colons (:).

harris48154

I'm feeling really dumb. In my Quicken, Banking transactions have Categories but I don't see any way to add a Category to an Investment transaction. What am I missing?

Chris_QPW

Not all investment transactions have categories, and as such you can only do this in transactions that have them. Note my only reason for responding to this thread was to point out how to enter tags, I have no idea if the idea about using them to separate a traditional 401K and a Roth IRA will work.

In that regard I just noticed that "Cash Transferred into Account" has a "Transfer account:" field. One has to realize that is in fact the "category" and you can add /tag to the end of it like: [Account]/tag. But note you can't do that in a paycheck reminder because that only allows an account name.

Sherlock

harris48154 said:

I'm feeling really dumb. In my Quicken, Banking transactions have Categories but I don't see any way to add a Category to an Investment transaction. What am I missing?

The transactions entries in an investment account that have a category include MiscInc, MiscExp, WriteChk, Deposit, OnlPmt, and Withdraw actions. The BoughtX, CGLongX, CGMidX, CGShortX, CvrShrtX, DivX, IntIncX, MargIntX, MiscExpX, MiscIncX, RtnCapX, ShrtSellX, BuyBondX, SoldX, Xin, and XOut actions have a Xfer Acct field that may also be extended with a tag like a category.

Jim_Harman

I think the main challenge here would be keeping track of the regular holdings vs Roth, especially if you hold the same securities in both buckets. You might be able to use different names for the same security but that would interfere with security matching if you are downloading.

Depending on your FI, you may get several ReinvDiv transactions downloaded if you hold the same security in different buckets. TR Price does this. That would make it easier to track your holdings by Roth vs regular.

Chris_QPW

I was thinking about this as far as solving the original "how to track" question, and I come up with a different answer than what has been suggested.

Basically my approach would be "Ignore the difference until you really have to worry about it."

Both account types are tax deferred, so until you take the money out there isn't anything you do different with either of them with maybe the planning of your retirement.

I would trust that the financial institution knows what it is doing to keep these separate, so at the time of withdraw I could direct them to the right type of IRA account or do a split in a checking account to do any taxes or such needed (Note you can't use the tax line for transfers out because of this difference).
(If the financial institution doesn't know this then you are going to have a real hard time convincing them that they are wrong based on what you are doing in Quicken.)

That brings us to about the only thing that is missing, planning for retirement.
Well you can separate them all you like, but in the Lifetime Planner all it knows is traditional vs Roth accounts. It isn't going to be able to do any separation like this for you based on a different security or such.

For planning like that I would be tempted to just make a couple of fake accounts that I only include in the Lifetime Planner and update them every once in a while based on the what the financial institution says the holdings are (the Simple investment mode would probably work great for this).

If I really didn't trust the financial institution and didn't mind the work then I would do both what @Jim_Harman is suggesting, but again do two fake accounts for the Lifetime Planner. Then again I might not even do that because frankly I don't think I will take my money out of my traditional/Roth accounts in the manner that the Lifetime Planner uses. So it is all pretty much a "ball park estimate" to me.

harris48154

When I first started downloading the transactions that included both PT and AT (Roth) investments I changed the security name of the AT. It did permit me to report them separately. It proved, however, to be a great deal of work reconciling the account. Though difficult, it was a satisfactory solution until I redistributed the shares in my 401(k). Straightening out that mess was nearly impossible.

If I could add a tag or category to BoughtX and SoldX transactions, it would probably work out well. That idea is what prompted my original post here. Since all transactions are downloaded together, I think that maintaining separate accounts for each would be too much effort.

I've come to pretty much the same conclusion that @Chris_QPW described above, there is no good solution. As much as I wanted to track them separately, I give up. It will get sorted out when I pull the funds out which won't be a long time from now.

Gilley7997

@Chris_QPW Yep, I think that is what I basically said above. Not going to worry about it until it matters and I move the money to different accounts.