How Does Quicken account for Roth 401(k) contributions?

I don't see the ability in Quicken to track the Roth Employee contribution separately from the Employer match pre-tax contribution
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Answers

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited January 6
    If you are using the Paycheck Wizard, you can record Roth 401(k) contributions in the After Tax deductions section.

    Unfortunately Quicken does not track Roth 401(k) balances separately once they are in the account.

    This Idea post covers proposed modifications to the Paycheck Wizard to improve support for Roth contributions. Please comment and vote - every vote counts!

    https://community.quicken.com/discussion/comment/20197511
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  • volvogirl
    volvogirl SuperUser ✭✭✭✭
    If you have both ROTH and pre-tax contributions I would think you need to have 2 separate accounts in Quicken and possibly at work.  
  • Rnambrose
    Rnambrose Member
    Thanks for the comments. What I did to resolve the issue was to create a second 401k investment account and showed my Roth contributions going into the Roth. I don't know how this will work in reconciling with the custodian. Quicken needs to make this upgrade since most 401(k) plans now allow Roth contributions.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    Because there is only one account at the custodian, it will be difficult to manage the dividend reinvestments.

    If it is consistent with your investing goals, one possibility would be to choose a different security for the Roth contributions. Then the Roth dividends would go only to the Roth security.

    When it comes time to take distributions, you should be able to roll the 401(k) to separate traditional and Roth IRAs.  
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  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭
    Because there is only one account at the custodian, it will be difficult to manage the dividend reinvestments.

    If it is consistent with your investing goals, one possibility would be to choose a different security for the Roth contributions. Then the Roth dividends would go only to the Roth security.

    When it comes time to take distributions, you should be able to roll the 401(k) to separate traditional and Roth IRAs.  
    How could the custodian have a single investment account including both the 401(k) and Roth 401(k)?  I would think doing that would be a legal and financial monstrosity for the custodian and for employees.
    If I were a betting man I'd wager that the custodian has assigned an employee account number for the employee and then has separate 401(k) and Roth 401(k) accounts placed beneath that.  If this is the case, there would be no need to be concerned about how dividends are split because the dividends will be paid out within each specific account with no comingling involved.
    Or what am I missing here?
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  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    Because there is only one account at the custodian, it will be difficult to manage the dividend reinvestments.

    If it is consistent with your investing goals, one possibility would be to choose a different security for the Roth contributions. Then the Roth dividends would go only to the Roth security.

    When it comes time to take distributions, you should be able to roll the 401(k) to separate traditional and Roth IRAs.  
    How could the custodian have a single investment account including both the 401(k) and Roth 401(k)?  I would think doing that would be a legal and financial monstrosity for the custodian and for employees.
    If I were a betting man I'd wager that the custodian has assigned an employee account number for the employee and then has separate 401(k) and Roth 401(k) accounts placed beneath that.  If this is the case, there would be no need to be concerned about how dividends are split because the dividends will be paid out within each specific account with no comingling involved.
    Or what am I missing here?

    The problem is that the split between traditional and Roth contributions, assets, and balances is tracked by the custodian but there is no mechanism to communicate that breakdown to Quicken or display it there. There is a mechanism to identify a "Cash source" for each 401(k) transaction, but there is apparently a fixed list of sources that does not include "Roth."

    And once this data gets to Quicken, there is currently no way to report on the different cash sources or to have an account that is part traditional and part Roth.

    Not to say it couldn't be done in Quicken, but it would not be easy.

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  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    I have created a new Idea post requesting addition of full support for Roth 401(k)s.
    https://community.quicken.com/discussion/7905566/add-support-for-roth-401-k-s

    Please review, comment, and vote on it.
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  • mshiggins
    mshiggins SuperUser ✭✭✭✭✭
    Because there is only one account at the custodian, it will be difficult to manage the dividend reinvestments.

    If it is consistent with your investing goals, one possibility would be to choose a different security for the Roth contributions. Then the Roth dividends would go only to the Roth security.

    When it comes time to take distributions, you should be able to roll the 401(k) to separate traditional and Roth IRAs.  
    How could the custodian have a single investment account including both the 401(k) and Roth 401(k)?  I would think doing that would be a legal and financial monstrosity for the custodian and for employees.
    If I were a betting man I'd wager that the custodian has assigned an employee account number for the employee and then has separate 401(k) and Roth 401(k) accounts placed beneath that.  If this is the case, there would be no need to be concerned about how dividends are split because the dividends will be paid out within each specific account with no comingling involved.
    Or what am I missing here?
    My 401(k) at Fidelity has both the traditional and Roth shares in a single account. They do track the shares by their different sources and I can see reports showing number of shares traditional vs. Roth. 

    I chose to track the Roth shares as Jim suggested - with a separate security for the Roth shares. 
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  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭
    @Jim_Harman , @mshiggins - Thanks for the education.  It still boggles my mind but as long as at least the custodian/administrator can keep it all straight I guess it's not a big problem...that is except for the employees and Quicken.  ;)
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