Why does my retirement account have a negative cash balance?

Question

I have a 401k account and use Quicken to connect to Alight and download the transactions. In my list of holdings, it shows all the fund I'm invested in, and it shows a negative cash balance of $-41,562.95.

(side note: why does it say "Holdings $0.00"?)

My total balance of this account in Quicken is $41,562.95 less than my actual balance I can see on the Alight website. This amount equals the total of the amounts deducted from my paychecks since I started tracking the account a couple of years ago.

Here's a screenshot showing just a few of the contributions and how the balance decreases by the Invest Amt each time:

I have another retirement account from a different employer, also with Alight, and it has the same problem.

I don't know if this is a Quicken problem or an Alight problem. But there are countless threads in this community about this issue and none of the ones I found provided a straightforward answer about why this is happening and, more importantly, how to fix it.

Does anybody know why this is happening and how to fix it?

I'm using Quicken Classic Premier for Mac (v7.10.1).

volvogirl · Accepted Answer

Have the amounts deducted from your paychecks been going into the retirement account?   You need to transfer the 401k deduction to the 401k account to add the cash to buy the shares.

jacobs · Accepted Answer

Do you mean by splitting my paycheck transaction in my checking account ledger and transferring these contribution amounts to the retirement account? Then the answer is no. I only download the net paycheck amount from my bank.

Yes, that's definitely your problem. You need to reflect the money coming into the investment account in order to pay for the shares of securities being purchased. Without it, you're purchasing shares at a cost, so your cash balance is driven evermore into the negative.

jacobs · Accepted Answer

I don’t know Mac but windows has a paycheck wizard.

There's no "paycheck wizard", but it's very easy to set up a paycheck once and have it appear all populated each pay period.

All you need to do is enter a new transaction with your net pay. Then open splits. the first split line should be your gross pay, followed by all your deductions/withholdings in the order they appear on your paycheck stub, including any transfer to a retirement account. It might look something like this sample paycheck:

Save the transaction, and then select Transactions > Schedule Selected Transaction. Specify the next check date and the schedule (such as every two weeks, or the last day of each month, on the 1st and 15th of each month, etc.)

When each payday rolls around, you only need to click on the gray scheduled transaction instance and click "Deposited" and you're done.

Note that if you're not on a fixed salary and your pay varies each paycheck, there's a bit more work required, but the process is the same. When you click on Deposited, then open the transaction, edit the net pay amount, and then tab through to edit the various withholding amounts which are a percentage of net pay.

jacobs · Accepted Answer

So when I download the paycheck deposit transaction from my bank, do I just delete it and keep the scheduled transaction?

@JMaverick  Assuming the amount of each transaction is the same, Quicken will typically automatically merge them into one. If Quicken doesn't do this, you can drag one transaction on top of the other to tell Quicken to merge them.