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Subject Author Date
Defined Contribution Retirement Plan Randy Stevens 04-26-2006
Posted by Randy Stevens on April 26, 2006, 11:57 pm
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 My employer has set up a Defined Contribution retirement plan where they
match a percentage of my paycheck and deposit it into a separate retirement
account. Only the employer contributes to this account, I do not contribute
anything. However, I can manage the monies in this account by investing in
a variety of funds in a manner similar to my company's 401K plan. The
account is similar to a 401K in that it is tax deferred; however, only the
company contributes.

I'd like to set up an account in Quicken similar to my 401K account where
monies are contributed in every week and used to buy available funds. There
really is not anything in the paycheck wizard that corresponds to a Defined
Contribution retirement plan.

I searched this forum, Quicken User Forums, and Quicken help, but I found no
suggestions. Ironically, Quicken Help has the definition of
"defined-contribution plan", but nothing more than the definition. There is
no definition of how to set up one in Quicken.

I'd appreciate any suggestions on how to set this up. I'm using Q H&B
Premier 2006 under Windows XP Media Edition.

Thanks.

Randy Stevens



Posted by danbrown on April 27, 2006, 1:24 pm
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 1) Create an investment account especially for this activity. DO NOT
make it a "Single Mutual Fund" account. DO NOT link it to a checking
account. DO make it a "Tax Deferred or Tax-Exempt" account. DO make
transfers into the account non-taxable.

2) Create an INCOME category "Employer Defined Benefit Contrib"
(abbreviating as necessary. DO NOT associate this line with a Tax-Line.

3) Create a memorized transaction in an existing cash-type account.
The transaction will have a net zero amount. The splits will consist
of an line for the "Emp Def Contrib" (or whatever) category, with an
appropriate amount AND a 2nd line to to your Investment account (step
1) with a negative amount. The net will be zero. Don't worry about the
negative sign, it'll work.

4) Schedule the transaction to occur each payday.

5) After running the transaction to deposit the employers money in your
investment account, go to the investment account and record the
appropriate investment purchases.

QED


Posted by Randy Stevens on April 28, 2006, 8:54 am
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Dan,

Thanks for your advice. I have set it up as you suggested.

I do have a question regarding step #1.
I have setup a investment brokerage account and I have designated it as
tax-deferred. However, I did not see an option for making transfers into
the account non-taxable. How do I do this?

I am using Q2006 Premier H&B.

Thanks.

-- Randy


> 1) Create an investment account especially for this activity. DO NOT
> make it a "Single Mutual Fund" account. DO NOT link it to a checking
> account. DO make it a "Tax Deferred or Tax-Exempt" account. DO make
> transfers into the account non-taxable.
>
> 2) Create an INCOME category "Employer Defined Benefit Contrib"
> (abbreviating as necessary. DO NOT associate this line with a Tax-Line.
>
> 3) Create a memorized transaction in an existing cash-type account.
> The transaction will have a net zero amount. The splits will consist
> of an line for the "Emp Def Contrib" (or whatever) category, with an
> appropriate amount AND a 2nd line to to your Investment account (step
> 1) with a negative amount. The net will be zero. Don't worry about the
> negative sign, it'll work.
>
> 4) Schedule the transaction to occur each payday.
>
> 5) After running the transaction to deposit the employers money in your
> investment account, go to the investment account and record the
> appropriate investment purchases.
>
> QED
>



Posted by danbrown on April 28, 2006, 1:00 pm
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Randy,
I'm using H&B 2005, but that shouldn't be a BIG (if, any) difference.

Use Control-A to open the accounts list
Highlight the particular account
Click Edit at the top of the Accounts List window
Click "Tax Schedule Info" at the bottom of the Account Details window
A window will open where you can specify the tax handling of the
account (specifically, of the income received within the account) and
of transfers to/from the account.

It's quite possible that the account is already set properly ... but it
never hurts to check.

Dan


Posted by danbrown on April 28, 2006, 3:07 pm
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Update to my original answer ('cause I'd forgotten that you CAN assign
a category to cash transfers INTO a non-checking linked Investment
account)..

Still do step 1.
Still do step 2.
Change step 3 to create a "Cash Deposit" transaction within the
investment account. Assign the "Emp Def Contrib" as the category on
the transaction.
Still do step 4 (only, now, it's an investment transaction.)
Still do step 5.

As JM correctly stated, setting the tax status in step 2 will handle
the tax treatment of the employer deposit. Still doesn't hurt to
double-check.

db


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