Do you keep track of original 401k contributions?

Posted by Gary on August 28, 2006, 1:49 pm

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Hi folks,

I was just wondering if anyone here keeps track of the original amount
they've contributed to their 401k or IRA, and if so, how? What I mean
is, say I put $5,000 in each year for 5 years - I've contributed
$25,000. That may now have a market value of $35k. Provided you've
only purchased securities (and don't have reinvsted dividends or
capital gains), you can easily see what your original cost basis is.

If though, you've sold a mutual fund and purchased another because you
either want to re-balance your portfolio or you've changed your
investment style, that transaction results in a sale of the old
security and a purchase of a new security. This new security's cost
basis will be the market value of the security you sold.. Another
scenario is where your company changes 401k managers and your
investment choices don't carry over to the new manager. You
effectively end up selling all of the old securities and purchasing new
ones. Also, reinvested dividnes and capital gains obfuscate this a
bit, too.

I realize because I have this set up as a retirement account that none
of these sales are affecting my capital gains, etc., but I guess I
would like to one day look back at my nest egg and know how much of it
was money I contributed and how much of it was gains or returns on that
investment. I don't necessarily want to change my transactions in Q to
trick it into a different cost basis, but I would like to find a way to
keep track of how much I actually contributed vs. how much was gains or
returns over my lifetime. This just for my own personal knowledge, and
possibly as a tool to teach my children just what you can accomplish by
starting to save for your retirement early. I think if I can show them
that Dad put this much away each month and in total, and it grew to
this much money by the time he retired, that would go a lot futher in
teaching them the importance of saving than just looking at one of
those graphs the 401k administrators hand out.

Do any of you actually keep track of what you have contributed vs. what
gains you've made? If so, could you share how? Or, have you decided
not to bother with it and just look at the returns on the investments
you currently have and the current value of you retirement accounts?
Luckily I've kept good track of things and haven't had that many
changes where I couldn't go back and figure out the amount now. I'm
getting ready to make some significant changes to many of the funds I'm
in (due mostly to overlap between my 401k and IRA), and now is the time
to figure out what I'm going to do if I'm going to do anything. Also,
I guess the thought watching that nice gap between cost basis and
market value get smaller bothers me for some reason.

Thanks,

Gary

Posted by bmcguirk on August 28, 2006, 2:18 pm

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> Do any of you actually keep track of what you have contributed vs. what

> gains you've made? If so, could you share how?

Yes, I do keep track of this. I've been using Quicken since 1996, the
year I started contributing to my 401k. I've entered every paycheck as
a Split Transaction, transferring my contribution and my employers
contribtion to a 401k account. I don't enter Buy or Sell transactions.
At the end of every quarter I enter a Gain or a Loss Transaction to
reflect my earnings/losses for the quarter. If I don't want to wait
until the end of the quarter, I can just add a transaction with today's
date and put the gain/loss in. Next week, I'll just change the date on
that same transaction and the gain/loss amount. Eventually, when the
end of the quarter comes, I'll make a permanent transaction that I
leave in the register for future reference. Now that I have several
years worth of transactions, I can easily view the register and scroll
back over the last few quarters or years and see my losses and gains at
a glance. You could also create a report for the 401k account that
lists just contributions and compare that with your ending balance.

At one time I tried to get granular and enter all the buy/sell
transactions, but my 401k funds aren't traded publicly, so it wasn't so
easy to download updates each day and see an accurate balance at any
given time. At another time I tried connecting with Vanguard online to
download my buy/sell transactions and that was a nightmare. What
Vanguard displays on the website to the 2nd decimal place is not
exactly equal to what Vanguard pushes down via Quicken WebConnect. So
my balances were never accurate anyway.

In the end, I reverted back to the way I had been doing things, (the
way I described in the first paragraph).

Posted by Andrew on August 28, 2006, 8:16 pm

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bmcguirk@optonline.net wrote:

>> Do any of you actually keep track of what you have contributed vs.

>> what gains you've made? If so, could you share how?

> Yes, I do keep track of this. I've been using Quicken since 1996, the

> year I started contributing to my 401k. I've entered every paycheck as

> a Split Transaction, transferring my contribution and my employers

> contribtion to a 401k account. I don't enter Buy or Sell transactions.

> At the end of every quarter I enter a Gain or a Loss Transaction to

> reflect my earnings/losses for the quarter. If I don't want to wait

> until the end of the quarter, I can just add a transaction with

> today's date and put the gain/loss in. Next week, I'll just change

> the date on that same transaction and the gain/loss amount.

> Eventually, when the end of the quarter comes, I'll make a permanent

> transaction that I leave in the register for future reference. Now

> that I have several years worth of transactions, I can easily view

> the register and scroll back over the last few quarters or years and

> see my losses and gains at a glance. You could also create a report

> for the 401k account that lists just contributions and compare that

> with your ending balance.

> At one time I tried to get granular and enter all the buy/sell

> transactions, but my 401k funds aren't traded publicly, so it wasn't

> so easy to download updates each day and see an accurate balance at

> any given time. At another time I tried connecting with Vanguard

> online to download my buy/sell transactions and that was a nightmare.

> What Vanguard displays on the website to the 2nd decimal place is not

> exactly equal to what Vanguard pushes down via Quicken WebConnect. So

> my balances were never accurate anyway.

> In the end, I reverted back to the way I had been doing things, (the

> way I described in the first paragraph).

Does your company provide you with a statement (perhaps quarterly) that
describes what you paid, what they paid, market gains, etc? Mine does, and
I use that to do all of what you asked about. It would be a real pain to
split the way you infer you have to if you need this info and your company
(or website) can't produce it!

--
-------------------------------------------------------------
Regards -

- Andrew

Posted by Bernie on August 28, 2006, 11:06 pm

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On 8/28/2006 12:49 PM, Gary wrote:

> . . .

> Do any of you actually keep track of what you have contributed vs. what

> gains you've made? If so, could you share how? Or, have you decided

> not to bother with it and just look at the returns on the investments

> you currently have and the current value of you retirement accounts?

> . . .

> Thanks,

> Gary

Yes, I have a split item in my paycheck for the contribution, and
purchase, each time. Then each week I update the unit value for each fund.

Thus with little effort on my part by selecting the Value view in
Quicken's Summary for the account I see my cost basis as well as the
current market value of each fund.

Bernie

Posted by JM on August 29, 2006, 10:34 am

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Gary wrote:

> Hi folks,

> I was just wondering if anyone here keeps track of the original amount

> they've contributed to their 401k or IRA, and if so, how? What I mean

> is, say I put $5,000 in each year for 5 years - I've contributed

> $25,000. That may now have a market value of $35k. Provided you've

> only purchased securities (and don't have reinvsted dividends or

> capital gains), you can easily see what your original cost basis is.

> If though, you've sold a mutual fund and purchased another because you

> either want to re-balance your portfolio or you've changed your

> investment style, that transaction results in a sale of the old

> security and a purchase of a new security. This new security's cost

> basis will be the market value of the security you sold.. Another

> scenario is where your company changes 401k managers and your

> investment choices don't carry over to the new manager. You

> effectively end up selling all of the old securities and purchasing new

> ones. Also, reinvested dividnes and capital gains obfuscate this a

> bit, too.

> I realize because I have this set up as a retirement account that none

> of these sales are affecting my capital gains, etc., but I guess I

> would like to one day look back at my nest egg and know how much of it

> was money I contributed and how much of it was gains or returns on that

> investment. I don't necessarily want to change my transactions in Q to

> trick it into a different cost basis, but I would like to find a way to

> keep track of how much I actually contributed vs. how much was gains or

> returns over my lifetime. This just for my own personal knowledge, and

> possibly as a tool to teach my children just what you can accomplish by

> starting to save for your retirement early. I think if I can show them

> that Dad put this much away each month and in total, and it grew to

> this much money by the time he retired, that would go a lot futher in

> teaching them the importance of saving than just looking at one of

> those graphs the 401k administrators hand out.

> Do any of you actually keep track of what you have contributed vs. what

> gains you've made? If so, could you share how? Or, have you decided

> not to bother with it and just look at the returns on the investments

> you currently have and the current value of you retirement accounts?

> Luckily I've kept good track of things and haven't had that many

> changes where I couldn't go back and figure out the amount now. I'm

> getting ready to make some significant changes to many of the funds I'm

> in (due mostly to overlap between my 401k and IRA), and now is the time

> to figure out what I'm going to do if I'm going to do anything. Also,

> I guess the thought watching that nice gap between cost basis and

> market value get smaller bothers me for some reason.

> Thanks,

> Gary

Yes, I have checked this on occassion out of curiosity. By proper
selection of customizing criteria, QW can give you this figure quite
easily - total, sub-total by year, etc. A Banking > Transaction Report,
customized for appropriate accounts and categories, can be created to
give you the info. It helps/simplifies the procedure if you include a
unique memo in your paycheck entry, e.g., 'Employee Contribution' as
you can include this in the customization criteria - all transactions
in which Memo Contains....

My case was complicated slightly by the fact that I have made both
pre-tax and after-tax contributions to the 401k. I differentiated
between these by creating classes - PT and AT - and appending the class
to the 'category'; e.g., an after tax contribution is indicated by
'[401k Acct]/AT'. An alternative is to include this info in the memo,
e.g., 'Emplyee Contribution - AT' or 'Employee Contribution - PT'.