401(k) Cash Contributions not Being Reinvested by Quicken

Roddy H

Every two weeks, I enter my paycheck details, itemizing each deduction. This includes a transfer from my salary to my 401(k) pre-tax account. The 401(k) account is set to connect to my bank and download detailed transactions. The problem is that after a year, I now have a cash balance in my 401(k), equaling the transfers over 12 months. At the same time, my 401(k) is downloading "buy" transactions and balancing the number of fund shares each month. The end result is an inflated 401(k). I expected Quicken to recognize cash in the account and allow a "buys" from cash in the account. However, the fund "buys" appear to be fabricated money. I am sure this is a simple fix. I have read this post and doing everything described, but still having an issue:

https://community.quicken.com/discussion/comment/20192027#Comment_20192027

Jon

If the downloaded “buy” transactions aren’t removing cash from your account as part of the purchase then there’s something off about those transactions. Make sure the transaction type is “Buy” and not “Add Shares”, and make sure the Price Per Share and Number Of Shares fields in the transactions are not $0.

Roddy H

The downloaded transaction is indeed "buy" and cannot be changed. I could changed the cost of shares or the number of shares purchased, but those are correct. When I started using quicken, I did Add Shares in the beginning to synchronize the number of share, but not shares have been added in two years. It seems I may need to reach out to Quicken Support for a ticket. Thank you.

jacobs

Does the running cash balance on a Buy transaction change from the balance on deposit transaction before it?

If you scroll back to the first transactions in the account, are there any placeholder transactions?

Roddy H

There are some placeholders that Quicken created when I first started using it in 2021. Quicken connected to my 401(k) brokerage and synchronized the number of shares in each fund, by adding shares. Since that time, the cash balance in the account has always been zero. There have only been "buy," "sell," and "reinvest dividend" transactions since 2021. These transactions were all downloaded from my 401(k) brokerage. In 2024, I started itemizing my paycheck to get a more accurate reporting on my true income and expenses. But, since January 2024, the cash balance has grown with every transfer and the "buy" transactions have been downloaded from my bank. I would rather see the "buy" transactions pull from my cash balance. I hope that helps.

jacobs

If the transfers are creating an increase in the cash balance, as they should, I don't understand if you're saying each Buy transaction does not use up any of that cash. And that connecting to your brokerage to download transacitons does not correct the cash balance. Something is missing here, but it's hard to understand without seeing any of the transactions.

Roddy H

401k Transaction Example.png

@jacobs Thank you for the insight. Attached is an example of the transactions in my 401k account. Each pay period, I contribute to traditional (pre-tax) and Roth (after-tax) portions of my 401k. My age also allows me to make catchup contributions to each account. On the same day, purchases are made for the funds that I have selected within my 401k, but the cash balance is not reduced. They are not even reduced during the next contribution period.

I did notice a small error on attached example. One of the contributions should be "After Tax," not "After Tax Catchup." I will make that correction, but that does not affect my particular issue. Not that you have seen the transactions, any ideas?

volvogirl

I think we need to see all the columns to the right, Inv amt, cash amt, and the cash balance

jacobs

As @volvogirl says, let's make sure we know what we're looking at: are the Iast three columns Invest Amt, Amount, and Balance?

Also, what brokerage is this, and is there a money market/sweep fund anywhere in the mix?

Can we test something quickly? Let's try entering a manual Buy transaction without downloading online. So enter a Buy transaction dated today, Growth Equity Fund, a purchase amount of $5,000 for 100 shares, and press enter. Does the cash balance remain unchanged?

Roddy H

Thank you for sticking with me so far. Attached are two images, both with the columns for INVEST AMT, AMOUNT, and BALANCE. The first one is from mid-year and shows all contributions and purchases done every pay cycle. The second shows the current cash balance along with the trial recommend by @jacobs. I created a fictitious buy of $5,000 for 50 shares at $100 each. However, the cash balance is not reduced by any amount. Because of this, my 401k account is falsely inflated by $26,497.70. This account is held at Fidelity Investments. Any ideas.

Roddy H

I reached out to customer service today and found an issue within Quicken for Mac. The "buy" of the securities is a transaction that occurs in the register before cash is transferred from my paycheck. There is only a date code for the transactions, not a time code. Since the "buys" occur before cash is tranferred, the "buys" are created with manufactured dollars. Therefore, customer service recommended that I enter an "adjustment" transaction after each contribution, to reduce my cash balance back to zero. This is a kludge, but the balance is now correct. My income and expense reports should also be correct, since adjustments should not be reported.

To test this date theory, I changed the date of my last contribution to one day sooner, hoping that Quicken would recognize the cash contributed a day earlier and subtract from that pool of money. But, that did not correct the issue. So, it seems this is a Mac related issue and one that requires a workaround. Hopefully, this will help someone else.

volvogirl

The register is sorted by Date, but in the wrong way. Click the Date column heading to toggle/reverse the Date sort. The dates should be going from old to new with the newest date at the bottom. The 10/30/24 entry should be below 10/18.

Jon

It’s possible that the downloaded “Buy” transactions are formatted in a way that they don’t actually use up any cash (I had been considering that possibility but didn’t know a way to test it). But that doesn’t explain why your manually entered transaction did the same thing - there’s plenty of cash in your account for it to draw from. So far I haven’t found a way to manually enter a “Buy” transaction that behaves like that; it’s acting more like a reinvested dividend transaction than a buy.

So I think there’s something else going on here, but I don't know what.

jacobs

The register is sorted by Date, but in the wrong way. Click the Date column heading to toggle/reverse the Date sort. The dates should be going from old to new with the newest date at the bottom.

@volvogirl I wouldn't say it's in the wrong date order. The default for Quicken Mac, in fact, is newest on top. Since the old Quicken Mac added new transactions at the bottom, I found this initially jarring, but I quickly came to prefer newest to oldest. But Quicken offers users the choice of either way, so it really doesn't matter.

@Jon I agree with you that because the manual Buy transaction didn't use any cash, the explanation that Quicken Support gave to @Roddy H seems wrong. I also don't believe a Buy transaction can be created to not use cash. No matter how a financial institution codes their downloads, Quicken is interpreting the QFX text and translating it into regular Quicken transactions.

@Roddy H There is no such thing as "manufactured cash" which is invisible. If a Buy takes place before a deposit normally, you'd see a negative cash balance followed by the cash balance going back to zero. If Quicken were to download something from Fidelity that told it the cash balance was wrong, it would adjust the cash balance with a placeholder transaction, or possibly adjusting a live opening balance transaction. But strangely, Fidelity is not telling Quicken to correct the ever-growing cash balance. I'm still suspicious that any live opening balance and/or placeholder transactions might be at fault here, but I can't quite figure how.

@Roddy H When you switch to Portoflio view and select Portfolio Value and By Security filters, do you see a list of your various mutual funds with Cash as the last line? And is the Cash value here the same as you see in the transaction register?

You said there were one or more placeholder transactions from back when you started. Could you scroll back to that time and take a screenshot of it/them. Then, the next time you download from Fidelity and there are new Buy and/or deposit transactions, see if the value of the placeholder transaction(s) have changed. Also, is there a transactions labeled Opening Balance or Live Opening Balance. Screenshot that now, and check it again after the next activity to see if the value has changed.

Also, can we go back to how these deposits are entered in your Fidelity account? Your screenshots show the deposits, but blacks out the Description/Category field. Are these showing something like "Transfer:[ABC Checking]"? What I'm getting at is wondering how your paycheck is downloaded from your checking account and coded for a transfer to the Fidelity investment account, and if they are transfer transactions, what happens in Quicken when you download from Fidelity. In an ideal work, the Fidelity download includes the deposit transactions and the Buy transactions, and then when your paycheck deposit is downloaded later, the transfers into Fidelity are automatically matched to the existing deposits created by the Fidelity download. But I'm wondering if this is what's happening.

Roddy H

Glad to see the thread is continuing.

@Jon and @jacobs I began using Quicken for Mac in 2021 when I felt it had progressed to an acceptable level. Obviously, I had my 401k account prior to 2021. When I made the first connect to my bank, it created adjustments, adding the number of shares I should have for each fund. I may have started the connection as SIMPLE and later switched over to DETAILED. Either way, it would only download a limited amount of older transactions and add adjustments where necessary. I checked the number of shares in each fund directly with my 401k brokerage and they are identical to the number of shares being recorded in Quicken. It is also recording the biweekly purchases of each fund with the correct dollar amount. However, it is not pulling those purchases from the cash balance in the account. At no time, has the cash balance been negative. It has always been zero, until I started to transfer funds from my paycheck. The Quicken technician was obviously stumped.

To test the theory that cash mush be in the account before a buy would use cash, I changed the date of my transferred cash to one day before each buy. This resulted in available cash before the buys. Still, the cash balance did not change. The buys are indeed from "manufactured" cash. They occur without any change to the cash balance. There is no question, this is a bug in the Mac software.

When I download my transactions from fidelity, now in DETAILED mode, I only get the buy, sell, and reinvest dividend transactions. There are no transactions that include cash contributions. My employer is obviously depositing the money directly into the account. Even then, I should see transactions for cash contributions.

When I view my online transaction history at Fidelity, there are no separate transactions for cash contributions. All contributions go directly to a fund. For example, I see a "contribution" transfer to my account for shares of the Value/Equity fund. There is no transfer of cash and then a purchase of the fund as separate transaction.

I even tried changing the account type from 401k to something else like a Brokerage, but no luck.

I am extremely thankful for the time and I would love to know more, but I am convinced this is a Mac bug.

jacobs

I don't think it's a bug in Quicken Mac. There are hundreds of thousands of Quicken Mac users, many of whom purchase shares in retirement accounts, and this is the first I've ever seen a problem like the one you're describing. Including lots of folks who use Fidelity. I continue to believe there's something wrong with either the opening of your Fidelity account in Quicken or the way the transactions are composed.

For myself personally, I enter my transactions manually, but it shouldn't be any different than if I downloaded — and it works correctly. Every Buy transaction decreases the running balance amount. I believe there's something we haven't identified yet about how Fidelity is recording these transactions. And there are contradictions, because you tried a manual transaction and the cash balance didn't change — and that's not Fidelity's action.

One thing I mentioned above is for you to locate the placeholder and/or opening balance transactions and to take a screenshot of them. Then re-create the dummy Buy transaction of $1,000 or $10,000 of shares in whatever fund you want. Then look back at those placeholder and/or opening balance transactions to see if the values have changed. Seeing those values change when you enter a Buy transaction — meaning Quicken is automatically adjusting to keep the balance unchanged — might explain some of what you're describing.

When I download my transactions from fidelity, now in DETAILED mode, I only get the buy, sell, and reinvest dividend transactions. There are no transactions that include cash contributions.

Hang on a second. In your screenshots you show Deposit transactions. Where are those transactions coming from? You didn't answer the questions I asked in my previous post about this, and it's really crucial to understanding that's happening. Do you manually enter them? Are they transfer transactions from splits in your paycheck deposit in your checking account? Are they matched transactions with deposits from Fidelity. (That is, If you Control-click one of the Payment/Deposit transactions, does the pop-up menu include the option for "Unmatch transaction"? If so, select that, and you should then have two transactions, one from Fidelity and one from the paycheck deposit.)

Also, would you mind posting a screen shot of one of the Buy transactions opened to show the detail.

You could also do a further test: create a dummy 401k account as a manual account. Give it an opening balance of, say, $10,000, and observe the register shows a $10,000 balance. Then enter a Buy transaction for $8,000 for any random amount of any security. Verify that the running cash balance has dropped to $2,000. If that works as described, you can then delete this dummy account.