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Q2005: Incorrect spouse 401(k) contribution cap for 2006

Has anybody else noticed this apparent error in Q2005?

Any entry for the spouse 401k contribution greater than $12k per year in the retirement planner assumptions shows up as the same number in the spouse contribution when you double-click 2006 in the Account Balances table.

That number is slightly less than $12k, which I think may be a correction for inflation.

So it appears that quicken is imposing an obsolete $12k limit on 401(k) contributions for spouses. The limit for 2006 is $15k.

Any employer contribution is also ignored by quicken if this limit is reached, which is another error, since the combined employer and employee limit is in fact the lesser of $40k and 100% of salary.

Any help appreciated, including letting me know my facts are wrong. But I have seen many sources for how these legal limits have evolved over the past few years. Here is one example:

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One workaround might be to split the 401(k) account into several accounts - I haven't tried this. I have seen recommendations in user groups to have a different 401(k) for each investment fund. Any opinions?

Reply to
James A. Crittenden
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Today I investigated some more into the problem of a spouse

401(k) contribution being capped at $12k for 2006 and beyond in the Account Balances table, even though the legal limit is $15k.

Today I found that if the 401(k) account is specified as 'Your retirement account' rather than 'Your spouse's retirement account', no such limit is imposed. The Account Balance table shows a deposit in 'your'

401k retirement account which exceeds the legal limit, and the sum of 'your' and spouse contributions is now correct.

This might be a way to use the retirement planner for estimating the future balance of the sum of the two 401k accounts, at least up until the time manadatory withdrawals begin. However, I also noticed that the 'Account Balance at Retirement' figure is different depending on if contributions are made to 'your' or 'your spouse's' retirement, even when no cap is reached. There may be a perfectly good reason for this, since quicken's info page

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out ways in which the two balances are treateddifferently, such as choosing which balance to takeearly withdrawals from. I'll continue to investigate ...

-- jim

Reply to
James A. Crittenden

Just in case anyone is following this:

The fix described in the previous message changing 'your spouse's retirement' account to 'your retirement account' isn't satisfactory, for example, if the spouse has an employer percentage match contribution, since it will use 'your' salary rather than the spouse salary.

I had another idea, which was to make a dummy retirement account and specify a spouse c> Today I investigated some more into the problem of a spouse

Reply to
James A. Crittenden

One final entry: I did finally succeed in reaching an Intuit support person who reproduced for himself the problem described in this thread. He verified that the limit in quicken 2005 is obsolete. I think he said it is wrong in Quicken 2006 as well.

The consequence is that the Account Balances table is too pessimistic - the balances are underestimated, since part of the contribution is not taken into account. The way to see if this is happening is to double-click any year's entry and see if the spouse 401k deposit amount is what one expects.

The > Just in case anyone is following this:

Reply to
James A. Crittenden

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