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Networth report inflated for checking account

wkimzey

My theory: In my bi-weekly paystub I was making 401K contributions and Employer match to a 401K. My employer changed providers of the 401K. When that transition completed, I closed the old 401K account. And my hunch is that what had been going correctly to that old 401k account, was re-categorized as some sort of hidden asset in my checking account (the account balance was correct, but in the networth report, the value grew (retroactively during when old 401K was active). I'm happy for just a bandaid fix for this—a hack—like adjusting the value without adjusting the account balance at the time that old 401K was closed.

I'm classic quicken on a windows laptop. I'm up to date. And this problem has been around for more than a year, and I'm just now needing to clean this up.

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mshiggins

Is your checking account balance correct? When did the 401(k) provider change happen?

wkimzey

Yes, the account balance is right (just the networth is inflated). The 401K switched in 2020. I don't remember when i closed the account in quicken. Maybe a year later.

mshiggins

There is a paycheck corruption issue that started in March 2022 the people are still finding today. Hopefully that is not the cause of the issue you are seeing, but you should take a look at this recent discussion of the paycheck corruption issue so you can rule it out as the cause.

https://community.quicken.com/discussion/7960126/net-worth-report-not-functioning-properly

wkimzey

Thx. I'll take a look. One thing I tried was turning on/off "include unrealized gains", and something odd happens mid month 2019, I start accumulating a negative gain (because quicken behind the scenes is trying to track potential tax liability maybe for early withdrawal of 401K). This doesn't cause this disconnect between checking account balance and its networth, because that shows as inflated since Jan 2016 paycheck (and yes I used the paycheck feature).

@Jim_Harman As suggested by @mshiggins I read through the paycheck corruption issue and feel my problem is related but not the same. I think my problem is specific to the scenario where I had been using the paycheck feature, and the 401K contributions and employee match became an issue, BECAUSE my employer switched 401K providers (Oct 1 2020) and so after I transitioned to the new 401K account in Quicken. I closed my old 401K account, and all the paychecks between Jan 2016 and Sept 2020 used to have a category which showed the transfer to the old 401K account, but the category now is blank.

Again the checking account balance is accurate throughout all of this, it is just the networth report that has a problem (coincident with the transactions to the old 401K account).

I'm really only interested in fixing the networth report for use going forward, I don't feel like going back and editing 3 years and 9 months of bi-weekly paychecks. And even if I did I don't know how. I've played around with a few payroll deduction categories, and they do strange things to the networth, by strange i mean, they don't track $ for $ with the deduction whose category I change or filled in. So is there a bandaid I could use to reduce the networth of that checking account without affecting its balance?

I'm Windows Quicken, R61.20. I've been using Quicken since 1998.

ProfileX

@wkimzey I'm in a similar situation as you, although I didn't actually "close" the 401k account, I've had too many problems with the feature so I've gotten in the habit of just deactivating online services, and marking accounts as hidden & separate. My employer also switched 401k providers but I don't see a correlation with the dates, I checked the net worth report for every year going back to 2011 (before any paycheck transactions or the 401k switch) and the report balance never matched my checking account register. I added some details here:

https://community.quicken.com/discussion/7960126/net-worth-report-not-functioning-properly

Jim_Harman

@wkimzey If you are using the Paycheck Wizard and your paychecks after the 401(k) provider change show a blank as the Category for the 401(k) contributions, that means the contributions are being recorded as an uncategorized spend from your checking account rather than as a transfer to the new 401(k) account. Perhaps until the old account was closed, the contributions were still going to the old account.

In the new 401(k) account, you should see no incoming cash transfers and a negative cash balance that accumulates as funds are purchased there. If you have attempted to correct the cash balance in the new account, there may be balance adjustments that set the balance back to zero.

Is that what you are seeing?

wkimzey

@Jim_Harman I set up the paycheck the way I always have, and I guess I don't recall the paycheck feature called a "wizard". So maybe I'm not actually using the wizard. I edit my paycheck fairly often because benefits changes, HSAs, % contribution to 401K, salary changes … I did it as recently as this month and nothing called "wizard" shows up. I edit the paycheck for this and all future instances. So the 401K contributions are transferred and show as "Xin" in the new 401K account.

I like your point about "a blank as the Category for the 401(k) contributions, that means the contributions are being recorded as an uncategorized spend" … but why is my account balance fine, as has been before, during the 401K change, and after, but the networth report shows the value of the inflated?

In my new 401K, since 2020, the deposits into the the 401k account are "Xin" transactions from checking. And when I download the transactions (from the new provider Fidelity) those are "Bought" transactions, and they are the same amount as the Xin, so the cash account balance in the 401K reverts to 0 after a couple days after each pay cycle. (Fidelity doesn't match the Xin transactions, but I leave them uncleared and unreconciled, happy to see the cash balance 0 and the new equity purchases.

So no I don't see a negative cash balance accumulating in the new 401K account.

Am I being clear enough?

@ProfileX Thx for the link to that discussion. I will check it out.

thanks for the help,

Bill

Jim_Harman

What is commonly called the "Paycheck Wizard" is the form you can fill out with the information from your paycheck, like this

In the situation I described, your checking account balance will be correct but the 401(k) contribution will go to the old account, the new account, or if the Category field is blank, it will be "spent" with no Category. I am trying to understand what happened when you closed the old account. You say

after I transitioned to the new 401K account in Quicken. I closed my old 401K account, and all the paychecks between Jan 2016 and Sept 2020 used to have a category which showed the transfer to the old 401K account, but the category now is blank.

Did you actually delete the old account, so it is no longer in your Quicken file? To check, go to Tools > Account list. If there is a Show hidden box at the bottom left, check the box and see if the old account is in the list.

If the old account is there, does it have transfers from your checking account before the transition to the new 401(k) provider? After the transition?

wkimzey

Jim, @Jim_Harman

Ok yes. I use the wizard.

No I didn't delete the old 401K account. I closed it. When I unhide it, yes the transactions are still there. In the checking account, though, the category is blank. (I still don't understand how the balance can be right, but the networth is not.)

And after the transition, yes the transactions go to the new 401K. When I created the new 401K account, I modified the paycheck to have the contributions go there.

So yes, once I closed the old 401K, the category is blank in the checking account transaction, the money is spent, because the account balance stays accurate, but from the point of view of the networth report, the money isn't spent, and worth is accumulating. It is only the networth report that is wrong.

As I mentioned above, I'm happy with a bandaide or hack, that just backs that value out of the networth report, without changing the balance of the checking account. I played around with filling the blank category with various deductions, and that just did odd things to the networth report—and by odd, as I say above, I mean the changes to networth aren't $ for $ the piece of the split transaction that I replace blank with some other deduction category. One of the things that makes this opaque, is that it is both the employee contribution and the employer match are messed up. It looks like 2 transactions from the point of view of the paycheck, but it is really only one when it shows up in the 401k account for example.)

Updated Monday morning EST: One kludge I could do: go back to all the paychecks that had pointed to the old 401K account, and fill in the blank category with the new 401K account, and then add a debit transaction to back it out of the new 401K account, and keep that cash balance 0. Even this is very odd, because my I have to add additional deductions to that paycheck to keep the net the same as was cleared back in 2016. This kludge it too much work for 5 years, twice monthly paychecks.

rgds, Bill