Using Quicken 2008 Home & Business on Windows XPsp2
I created a 401K mutual fund account. Each paycheck (which includes Gross pay and all deductions) includes a transfer to this 401K Fund. All the transfers for this first quarter are already entered and I'm trying to reconcile the account. It appears that the cash balance is zero. So when I try to reconcile this account, I expected it to ask me my changes is Share Balance. Instead it is asking me what the new Cash Value is.
If I put the correct cash value from the statement, this account will put a an adjustment and bring the cash value to the correct amount. But this is wrong. I have Shares that have been purchase. You can't reconcile this way.
Investment account reconciles do not attempt to reconcile your "holdings", just your cash. [The reconcile dialog will allow you to "mark" all your investment transactions as "R"econciled, but it makes no attempt to determine how many shares you own, how you got those shares, or what they are worth.]
It is your responsibility to insure that the correct investment transactions are in the register before you reconcile (I recommend never accepting any Quicken offer to enter an adjustment, even for cash, and even in non-investment accounts. If one is willing to accept adjustments to get the balance "correct", there seems little reason to bother reconciling.]
You can download transactions or enter them manually (you can also employ the "Update 401k Holdings" wizard, but I think this is generally not a good idea ... especially if you have knowledge of the number of shares/units owned, and even more so if you have an independent record of the real-world transactions in the account).
You should have your paycheck setup in Quicken to transfer your contributions to your Quicken 401k account.
Once Quicken has transferred the funds from your paycheck transaction to the 401k account, there will be cash in the 401k account which you can use in the Buy transactions you enter (or download). After all your transactions are entered for the statement period, you can reconcile.
To reconcile your 401k account holdings, I suggest a report like the Portfolio Value report. When a Portfolio Value report for the account agrees with your printed statement for the account, you should be reconciled. Then the Quicken "reconciliation" dialog is merely a formality to mark the appropriate transactions as reconciled.
My understanding is that the previous version of Quicken had an error and allowed me to make the entries, that I've done. This new version, fixes this error. At the same time, my wife has a mutual fund closed out at the end of
2007 and fund goes to a new Mutual Fund that began Jan 2008. So this issue began because I had to create a new 401K fund, transferred the old to the new, then make weekly Investments (automatically from her paycheck). So we are talking about 13 entries that Quicken treats as a BoughtX incorrectly (in my opinion). In reality, the Dollars Amounts (401k amount) never goes into my checking account so it should not be a "Transfer" (therefore resulting in a Cash Bal change of zero).
The other issue is the matching portion that the company puts in. There's no good way for Quicken to do this and I don't want to download the numbers (to afraid that will mess other things in other registers)
I'm not sure I understand what your way (other than a direct download) of solving the issue. There has to be a way for and investment that includes an employer match portion that utilizes the "Bought".
Not clear just what you did here. The individual steps you took (and what the account types were/are) might be helpful.
If, as you told Dan, you have managed to create a Quicken 401k account designated as a Quicken "Single Mutual Fund" account (not possible to do in Q2008, but might have been carried over from previous version that permitted such a result to occur), that is the reason you see BoughtX transactions. A SMF account can not hold any cash, so transfers into the account automatically create BoughtX transactions. In my opinion, SMF accounts are never a good idea.
In the real-world, the funds are "transferred" from your company's payroll account to your 401k account.
In Quicken, the only logical source of contributions to a Quicken 401k account is your paycheck. No one is going to create an "employer payroll account" from which to transfer their contributions to their 401k account (beggng the question of how the funds would get into a Quicken "employer payroll account").
When you setup a Quicken paycheck transaction, the "transfer" to the 401k account comes from the paycheck itself, but those funds are never deposited in the Quicken account where your paycheck is deposited. Trust me: it works.
Yes, there is. Once again, it's in the Quicken paycheck transaction (where the Quicken Paycheck Wizard makes it easy to enter the matching employer amount as a pre-tax deduction... which also is "transferred" into your Quicken 401k accou)..)
It's not necessary to download, though there is not reason for a download to mess anything up. You don't have to accept all (or any of) the downloaded transactions if they don't agree with your approach ... and you can modify downloaded transactions after they have been accepted.
There is no magic "solution". But the only other "approach" to the situation I know of is the "Update 401k Holdings" wizard (button) that is available in Quicken 401k accounts. I do not think it will make your life easier, I think it will make it harder. The only time I might consider using it is if I had a
401k that did not provide me with the number of shares of securities that I owned.
1.) Don't use Single Mutual Fund accounts. [You can never enter a Bought transaction in a Quicken account designated as a Single Mutual Fund account (a designation that may not be visible for a
401k account setup in earlier versions of Quicken.]
2.) Get the contributions "transferred" into the 401k account. Simplest way: paycheck transaction. Otherwise you can create a fake transfer (or 2) into the account and designate the 401k account itself as the source account of the transfer. [If your
401k company provides the contribution transactions as part of their download, you could rely on just their download to get the contributions into your Quicken account ... but not all 401k admins provide the contributions in their downloads.] The "transfers" of your contributions into the account provide the cash to make the purchases ... just as they do in the real world.
3.) Enter (manually or by download) the Bought, Dividend, Reinvest, etc transactions to acquire the correct holdings.
4.) Use one, or more, Quicken reports to "reconcile" your account to an external source, like your quarterly statement.
5.) Use Quickens "reconcile" dialog to mark all the appropriate transactions as "reconciled".
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