Using Bills Summary (sheduled transactions) for 401Ks

[Mark Fields]

My employer pays us weekly, and I have $$$ withheld and they match at 4%.  My wife's employer likewise.

I have a transaction set up to make the deposit into the 401K cash account for both companies.  Its simple and save time.  For "Received from: I put "Acme Co 401K Plan" and Deposit to the cash account.  These are scheduled weekly and wehn I see the money went in, I make the transfer.

Once in the Investment cash account I make the mutual fund purchases from the Portfolio Manager.  But if there were a way to do it similar to the Bills Summary I could semi-automate this.  I would still need to get the price of the mutual fund, but the dollar amount invested per fund.

I don't mind doing this but I have to say I'm always looking for an easier way and never found this.

I have neve downloaded a QIF file or anything like that since Money 1994, because I tried it a few weeks and had so many duplicated transactions I just felt simple is better and make the transactions manually.  Tedious?  Yes.  Accurate and do I see when the my money is going? Absolutely.

Looking for some thought's on this.  I use Money Plus Deluxe "Sinset" version 17.0.120.3817 and Gaier's Microsoft Money Online Quotes version 2.5.  IT was well worth the $10 or whatever.

Mark

[joe dempsey]

One way to automate this would be to have the calculations done in Excel and then use a macro to write them transactions to a QIF file which can be imported to Money

Wheher it is worth it, depends on how easy it is to automate the calculations in Excel - given the dollar value invested and the price of the funds

[Dick Watson]

How I used to do this back when I was a working stiff:

1) from scheduled paycheck transaction, before-tax and/or after-tax transfer : [401k cash acct] split lines to account for my before-tax, after-tax, and catch-up contribs. I also put the employer match money in as an income item and then transferred it as well. This way, all the contribs from the paystub or not were in one transaction. These were scheduled to align with paystubs.

2) I had a scheduled "bill" for the 401k cash account, payee "(split to 401(k) funds)", that was a split with multiple Buy Investment/CD : [401k investment acct] entries according to my specified investment choices and how employer match was invested. These were scheduled to align with the plan's mechanics for when purchases got made. Since I was salaried, the $value for each of these split lines was generally known in advance (with very occasional exceptions for award, bonus, that sort of thing), but the price/shares could not be known in advance. So, for the scheduled transaction, I'd just use some "close enough" number for price and let Money schedule a calculated number of shares. As soon as online purchase information was available from the plan website, I'd enter these bills from the schedule and edit the splits on the way past to delete guess shares, delete guess price, add real shares purchased, and let Money calculate the effective price.

Here's what one of these looks like after entry in the register:

Obviously, this is a fair amount of manual transaction entry, but the scheduled "spilt to funds" investment purchases in one split transaction made it much easier so that only the actual shares number was manual entry for every purchase. At the worst case, this was four transfers in to the cash account from paycheck transaction weekly and a split with four investments also weekly for me and about the same only twice monthly for my wife.

You will need to establish some workflow for periodically reconciling the share balances with the plan statements. There's been a thread on that recently.

[Dick Watson]

I should add: a more detailed discussion, with some example transaction split elements, of how I accounted for all the 401(k) contribution elements was also in a recent thread.

[Mark Fields]

Dick,

Thanks for the screen shot.  This is genius, I'd say it took less time to set up the initial recurring "Bill" than it does to make the individual purchases each week.  Now when the buys are recorded in the 401K it will be simple to start the split from the Bill planner and edit the share price.

This will also save some aggravation I've had when accidentally "buying" the same mutual fund twice.  It's less troublesome with your method.

Lastly the associated cash account looks cleaner.

You have made my day.

Mark Fields

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[lttlg...@gmail.com]

Aloha Mark,

 

Glad it’s going to work for you and that I could help.

 

One piece of advice: you write “…and edit the share price.” I recommend you edit the *shares* and let Money calculate the *price*. The total number of shares is the one thing you can always reconcile, but only if you track the purchased shares exactly. (Note this is how the plan is going to do it as well. They neither know nor care if you paid something close to $12.346 or $12.345678 per share. But they do know, and will track, you bought exactly 105.234 shares.)

 

The Money calculated share price will be “close enough” for any sensible use. But the difference between close enough and exact on shares is huge. Especially when it comes time to sell. What happens if Money calculates the shares is you end up with all kinds of fractional shares problems down the road since Money thinks you are owning 1,234.568791234 or some such shares. By using correct shares, the Money share balance will agree that this is really 1,234.569 shares just like the plan records show.

 

Stay safe out there,

 

Dick

[Dick Watson]

I should add: this accumulating Money-calculated fractional shares problem is a leading cause of "negative share balance at some point" headaches when selling shares down the road.