403b Setup Best Practices

4pickering

Hi, It's taken me time to get used to the way things get done in the Mac version instead of Windows, but I'm coming around. The data file I've curated for the last 15 years got corrupted with the conversion to the latest Mac release - this includes the backup I made. I have an open ticket with Quicken that I have yet to follow up on, but in the interest of keeping things up to date, I decided to start anew and rebuild the file natively.

My question is since I'm starting from scratch and the account is 4 years old, what best practices would you recommend for tracking a 403b? I'm a teacher and I have no employee match. Also, the firm handling the 403 is the Equitable, which I know doesn't support downloads. I'm specifically interested in tracking the performance of my plan. I know I'll need to enter the transactions manually each month. I'm not an accountant, but I do like knowing how well my money is doing. Thanks in advance!

jacobs

It really depends how much data you want to enter, going back how far.

The simplest way might be to enter your holdings as of December 31, 2021, and then enter all transactions since then in order to start building a history you can track. Or you could go back to the end of 2020, or 2019, or as far back as you want, knowing you'll need to enter your investments from payroll withholding and reinvested dividends along the way. 

Wherever you choose as your starting point, you'd use Add Shares transactions to establish your holdings. So if your December 31 statement says you had 123.45 shares of XYZ Fund, you'd do and Add Shares transaction for that, and repeat for each of your holdings. Add Shares creates holding "out of thin air", show it doesn't require you to show where the cash came from for the purchases. Moving forward from your starting point, you'd have each paycheck include a split for the amount withheld for your 403b asa Transfer to the 403b account. This creates cash in the 403b account, and you'd then enter Buy transactions to use up the cash for the shares you purchased.

I'm not sure I understand your second post about a cash balance. Every paycheck withholding creates a transfer to the 403b account as cash, but in most cases, people have that cash automatically purchase shares of one or more funds, which leaves no cash. Do you have actual cash in your 403b account, and if so, what's the source of that cash? Does your withholding dump into a money market (cash) account, and you have to execute fund purchases manually? 

4pickering

Just to clarify one question - I can enter the current balance, which shows as Cash, but I prefer to track the units and unit value (aka price per share) but I can't seem to figure out how to convert the cash balance as such.

jacobs

It really depends how much data you want to enter, going back how far.

The simplest way might be to enter your holdings as of December 31, 2021, and then enter all transactions since then in order to start building a history you can track. Or you could go back to the end of 2020, or 2019, or as far back as you want, knowing you'll need to enter your investments from payroll withholding and reinvested dividends along the way. 

Wherever you choose as your starting point, you'd use Add Shares transactions to establish your holdings. So if your December 31 statement says you had 123.45 shares of XYZ Fund, you'd do and Add Shares transaction for that, and repeat for each of your holdings. Add Shares creates holding "out of thin air", show it doesn't require you to show where the cash came from for the purchases. Moving forward from your starting point, you'd have each paycheck include a split for the amount withheld for your 403b asa Transfer to the 403b account. This creates cash in the 403b account, and you'd then enter Buy transactions to use up the cash for the shares you purchased.

I'm not sure I understand your second post about a cash balance. Every paycheck withholding creates a transfer to the 403b account as cash, but in most cases, people have that cash automatically purchase shares of one or more funds, which leaves no cash. Do you have actual cash in your 403b account, and if so, what's the source of that cash? Does your withholding dump into a money market (cash) account, and you have to execute fund purchases manually? 

4pickering

Thanks and sorry if I was confusing. Just as I posted this AM, I add a new investment account, and selected it to be a 403b. After choosing bank not listed (or whatever the verbiage was) it asked me to enter my balance - so I put in the cash value. I did not see where/how to add shares or buy, but what your saying makes sense. I just didn't find those actions in the interface. I guess I have to look more thoroughly.

jacobs

Click on the account in the left sidebar. Click on the Transactions tab. Click on New, enter the date, and pull down the menu in the Type field to find all the transaction types like Buy, Add Shares, Reinvest Dividend, etc.