Lifetime Planner IDEA: Improve how IRA and 401K Accounts are Modelled in LTP

Scooterlam
Scooterlam SuperUser, Windows Beta Beta
     Lifetime Planner IDEA:  Improve how IRA and 401K Accounts are Modelled in LTP


                               Please Vote!   Add your comments and thoughts!


1.   Update IRA and 401K out-of-date contribution limits. 

2.   Update Spousal IRA Contribution limit. 

3.   Fix Spouse IRA AND 401K Ownership issue. 

4.   Update IRA and 401K contribution AGE limits.

5.   Update In-App and website LTP HELP sections re: tax deferred account rules

6.   Implement IRA and 401K Catchup Contributions for those age 50 or older. 



This IDEA expands upon an old IDEA that was lost (along with the voting record) when Quicken moved to a new forum software vendor...

Quicken LTP enforces certain modelling rules with respect to tax deferred account types such as IRAs and 401Ks.   Overtime, application development has not kept up-to-date with changes in IRS rules.    NOTE:  While the main focus of this IDEA is on IRA and 401k plans, there are other Quicken tax-deferred account types that are also likely out-of-date and need similar review, update and REGULAR maintenance.



PROPOSED UPDATES, FIXES, ENHANCEMENTS


1.   Update IRA and 401K out-of-date contribution limits. 

Ensure that future contribution limit changes are updated timely, as IRS rules change.  Current contribution limits out of date.   This is a long-standing issue.   See Table 1 and IRS RULES Reference Link, below.


2.  Update Spousal IRA Contribution limit. 

Ensure that future spousal contribution limit changes are updated timely, as IRS rules change.  Yes, Spousal IRA contributions are modelled in LTP.   BUT, they are not updated to current contribution limits.  See IRS RULES Reference Link, below.


3.  Fix Spouse IRA AND 401K Ownership issue. 

In LTP, spouse IRA and 401K ownership is lost (reverts to "your retirement") after assigning spouse ownership at IRA or 401K account creation!  That is, spouse IRA/401K ownership selection does not convey from account creation to LTP Account Details.  This issue may extend to ALL tax-deferred account types.   Impacts #2.  A separate IDEA post


4.   Update IRA and 401K contribution AGE limits. 

With the Secure Act, contributions to these plans can continue after age 72.  In LTP today, contributions stop at age 70.  A separate IDEA post


5.   Update In-App and website LTP HELP sections re: tax deferred account rules

Very out of date.  In some cases, Help is so outdated it is referring to IRA contribution limits older that what is currently modelled in LTP! See Reference Link, below.  Likely more outdated information here.


6.   Implement IRA and 401K Catchup Contributions for those age 50 or older. 

IRA catchup contributions are modest ($1 000) while 401K catchup contributions are substantial ($ 6 500).   A common feature in competitive planners.  In Quicken, age of the user can be derived from About You section and a dynamic rule allowing Catchup Contributions applied.  See IRS RULES Reference Link, below.




Table 1 - OUT OF DATE CONTRIBUTION LIMITS as of 09.09.2021


    ACCOUNT TYPE       QUICKEN LTP  LIMIT        IRS CURRENT     
         
            
         401K                         $ 15,000                     $  19,500      
                                               
         IRA                            $   5,500                     $    6,000   
                                                     
                                                       

For perspective...The last Quicken update to the IRA limit (that was published) was Q2019 R14.21 Release Notes - Oct 2018.   That revision set the IRA limit to $5.5K.   The current IRA limit of $6,000 has been in place for over 3 years now - no Q updates.    I cannot find a published 401K Quicken update, although one or more was obviously done, but not since 2006, which is when reportedly the IRS raised the IRA limit to $15K. 

For the contribution limits/catchup contribution issue, I recognize there is a workaround, creating multiple accounts to achieve the maximum contribution limit.  But, why depend on "tribal knowledge" when the rules (outdated as they are) are already built in the model but simply need updates?   

Too many "broken windows" accumulating here.   The model must be maintained or otherwise aspects unwound, leaving it to the user to determine/ enter certain applicable and appropriate data.  Note:  Most competitive consumer and professional retirement planners enforce these kinds of rules in their models and for good reason.

LTP is a real gem in Quicken's feature set, but it needs attention.


REFERNCE LINKS


IRS RULES for Retirement Plans - Everything you need to know....
https://www.irs.gov/retirement-plans

Online Help Example citing wrong information about contribution limits et al
https://help.quicken.com/display/WIN/Tell+me+how+the+Lifetime+Planner+uses+tax-deferred+savings+information

IRS Summary of Current and Recent Past Contribution Limits
https://www.irs.gov/retirement-plans/cola-increases-for-dollar-limitations-on-benefits-and-contributions

Historical 401K Contribution Limits
https://dqydj.com/historical-401k-contribution-limit/



14
14 votes

New · Last Updated

Comments

  • Scooterlam
    Scooterlam SuperUser, Windows Beta Beta
    It appears that both IRA and 401k contribution limits have been updated.  I assume that these were part of the Lifetime Planner "improvements" in R44.20?  Image 1.

    From my quick look....
    • 401K maximum contribution for 2022, in LTP, is $20,500.  Grab from my test file in Image 2
    • IRA maximum contribution for 2022, in LTP, is $6,000.  Grab from my test file in Image 3

    These figures are inline with 2022 IRS rules.  2023 rates are now published with increases in both IRA and 401K limits of 6500 and 22500, respectively.  No clue as to how LTP indexes (or doesn't) current year contributions for future years.   Seems odd, nonetheless.  

    I have not verified the other "demands" in this idea.    But, judging from the half-baked RMD solution in R22.40, I would expect that not all of the demands were implemented. 

    Will Quicken embark on a yearly LTP maintenance update for these contribution limits?


    IMAGE 1:



    IMAGE 2




    IMAGE 3