Roth 401k

Posted by JM on October 4, 2006, 10:21 pm

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Sam wrote:

> I cannot seem to find a statement at the moment, I logged onto the site

> and it appears that the contribution deposits are recorded separately

> and I see that the investment purchases are made separately (see below

> for an example).

> 10/03/2006 Cash Safe Harbor Match Contributions Cash Receipts

> 10/03/2006 Cash Employee Roth 401k Contributions Cash Receipts

> 10/03/2006 Stock A Safe Harbor Match Contributions Purchase

> 10/03/2006 Stock A Employee Roth 401k Contributions Purchase

> .

> Download is not available so I will have to manually enter the data and

> I really want to set this up in the simpliest manner possible. My

> thoughts are that I will set this up so that contributions are entered

> when I enter my paycheck transactions and any other deposits are

> receipts I will enter just once per quarter.

> Any suggestions on how to do this so that I can minimize manual work?

> Thanks, Sam

Given that QW does not have provision for the Roth 401k - and looking
ahead to the day you retire and start making withrawals:
I would set up separate accounts; one for your contributions,
investments and growth and one for the employer match. These accounts
should be tax-deferred.

Your contributions can be easily handled in the paycheck as an
after-tax deduction - a transfer to the appropriate account.

For the match, I would set up a scheduled deposit [monthly?] to the
'Match' account - have it automatically entered in the register on or
about your regular payday. QW has a box for category for the deposit -
the QW category '_401EmployerContrib' is not available [??] in the
drop-down box but you can create a category for this. This category
will not have a tax-line assignment - it has no tax implication at
present.

This should easily match the deposit activity reportd by your FI.

You can then enter the Buys, Sells and income events from info provided
by the FI.

My primary reasoning for the two-account approach is for handling
future with-drawals. The draws from your contribution account will be
fully tax-free. The draws from the match account will be fully taxable
as ordinary income. Draws from a single account would be taxable on a
pro-rata basis - some percentage taxable - perhaps the ratio of
employer/employee contributions if they are always consistent. QW has
no provision to split draws on a tax-free/taxable basis - they are
either one or the other and not a mix.

Down the road, if QW does make provision for the Roth 401k account, you
could then probably combine the accounts by transfering holdings.

For reporting purposes and comparing to the FI's statements, seems one
could create customized reports which included these two accounts -
holdings, transactions, etc.

My thoughts - comment??

Posted by Sam on October 5, 2006, 8:16 am

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Thanks for the detailed response. I am going to try your
recommendation this weekend and see how it works.

As a side note (not a quicken question) I wonder what is going to
happen when I quit this job and roll my roth 401k over to my brokerage
company. I would assume it would roll into a roth ira rather than a
traditional but where would the pretax dollars (the employer
contributions) go? I am sure they would not roll into the roth ira
unless I paid the tax during the roll over. I guess they would end up
in a traditional ira so that I would pay tax at withdrawal. I already
have both a roth and traditional ira so I think my existing accounts
could take the roll over without creating anything new. It will be
interesting when that day comes.

Thanks again

Sam

Posted by John Pollard on October 5, 2006, 8:52 am

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> Sam wrote:

>> I cannot seem to find a statement at the moment, I logged

>> onto the site

>> and it appears that the contribution deposits are recorded

>> separately

>> and I see that the investment purchases are made separately

>> (see below

>> for an example).

>> 10/03/2006 Cash Safe Harbor Match Contributions Cash

>> Receipts

>> 10/03/2006 Cash Employee Roth 401k Contributions Cash

>> Receipts

>> 10/03/2006 Stock A Safe Harbor Match Contributions

>> Purchase

>> 10/03/2006 Stock A Employee Roth 401k Contributions

>> Purchase

>> .

>> Download is not available so I will have to manually enter

>> the data and

>> I really want to set this up in the simpliest manner

>> possible. My

>> thoughts are that I will set this up so that contributions

>> are entered

>> when I enter my paycheck transactions and any other deposits

>> are

>> receipts I will enter just once per quarter.

>> Any suggestions on how to do this so that I can minimize

>> manual work?

>> Thanks, Sam

> Given that QW does not have provision for the Roth 401k - and

> looking

> ahead to the day you retire and start making withrawals:

> I would set up separate accounts; one for your contributions,

> investments and growth and one for the employer match. These

> accounts

> should be tax-deferred.

> Your contributions can be easily handled in the paycheck as an

> after-tax deduction - a transfer to the appropriate account.

> For the match, I would set up a scheduled deposit [monthly?]

> to the

> 'Match' account - have it automatically entered in the

> register on or

> about your regular payday. QW has a box for category for the

> deposit -

> the QW category '_401EmployerContrib' is not available [??] in

> the

> drop-down box but you can create a category for this. This

> category

> will not have a tax-line assignment - it has no tax

> implication at

> present.

Just curious; why not setup the match in the paycheck as well?
(Assuming op does not have a regular 401k with a match).

[Ok, you probably would get an unwanted zero employee
contribution; is that why?]

> This should easily match the deposit activity reportd by your

> FI.

> You can then enter the Buys, Sells and income events from info

> provided

> by the FI.

> My primary reasoning for the two-account approach is for

> handling

> future with-drawals. The draws from your contribution account

> will be

> fully tax-free. The draws from the match account will be fully

> taxable

> as ordinary income. Draws from a single account would be

> taxable on a

> pro-rata basis - some percentage taxable - perhaps the ratio

> of

> employer/employee contributions if they are always consistent.

> QW has

> no provision to split draws on a tax-free/taxable basis - they

> are

> either one or the other and not a mix.

> Down the road, if QW does make provision for the Roth 401k

> account, you

> could then probably combine the accounts by transfering

> holdings.

> For reporting purposes and comparing to the FI's statements,

> seems one

> could create customized reports which included these two

> accounts -

> holdings, transactions, etc.

> My thoughts - comment??

--

John Pollard
First initial underscore Last name at mchsi dot com
Please reply to newsgroup

Posted by JM on October 5, 2006, 12:11 pm

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John Pollard wrote:

> >

> > Sam wrote:

> >> I cannot seem to find a statement at the moment, I logged

> >> onto the site

> >> and it appears that the contribution deposits are recorded

> >> separately

> >> and I see that the investment purchases are made separately

> >> (see below

> >> for an example).

> >>

> >> 10/03/2006 Cash Safe Harbor Match Contributions Cash

> >> Receipts

> >> 10/03/2006 Cash Employee Roth 401k Contributions Cash

> >> Receipts

> >>

> >> 10/03/2006 Stock A Safe Harbor Match Contributions

> >> Purchase

> >> 10/03/2006 Stock A Employee Roth 401k Contributions

> >> Purchase

> >> .

> >>

> >> Download is not available so I will have to manually enter

> >> the data and

> >> I really want to set this up in the simpliest manner

> >> possible. My

> >> thoughts are that I will set this up so that contributions

> >> are entered

> >> when I enter my paycheck transactions and any other deposits

> >> are

> >> receipts I will enter just once per quarter.

> >>

> >> Any suggestions on how to do this so that I can minimize

> >> manual work?

> >>

> >> Thanks, Sam

> >

> > Given that QW does not have provision for the Roth 401k - and

> > looking

> > ahead to the day you retire and start making withrawals:

> > I would set up separate accounts; one for your contributions,

> > investments and growth and one for the employer match. These

> > accounts

> > should be tax-deferred.

> >

> > Your contributions can be easily handled in the paycheck as an

> > after-tax deduction - a transfer to the appropriate account.

> >

> > For the match, I would set up a scheduled deposit [monthly?]

> > to the

> > 'Match' account - have it automatically entered in the

> > register on or

> > about your regular payday. QW has a box for category for the

> > deposit -

> > the QW category '_401EmployerContrib' is not available [??] in

> > the

> > drop-down box but you can create a category for this. This

> > category

> > will not have a tax-line assignment - it has no tax

> > implication at

> > present.

> Just curious; why not setup the match in the paycheck as well?

> (Assuming op does not have a regular 401k with a match).

> [Ok, you probably would get an unwanted zero employee

> contribution; is that why?]

> > This should easily match the deposit activity reportd by your

> > FI.

> >

> > You can then enter the Buys, Sells and income events from info

> > provided

> > by the FI.

> >

> > My primary reasoning for the two-account approach is for

> > handling

> > future with-drawals. The draws from your contribution account

> > will be

> > fully tax-free. The draws from the match account will be fully

> > taxable

> > as ordinary income. Draws from a single account would be

> > taxable on a

> > pro-rata basis - some percentage taxable - perhaps the ratio

> > of

> > employer/employee contributions if they are always consistent.

> > QW has

> > no provision to split draws on a tax-free/taxable basis - they

> > are

> > either one or the other and not a mix.

> >

> > Down the road, if QW does make provision for the Roth 401k

> > account, you

> > could then probably combine the accounts by transfering

> > holdings.

> >

> > For reporting purposes and comparing to the FI's statements,

> > seems one

> > could create customized reports which included these two

> > accounts -

> > holdings, transactions, etc.

> >

> > My thoughts - comment??

> --

> John Pollard

> First initial underscore Last name at mchsi dot com

> Please reply to newsgroup

John -

To be truthful - did not really think it through - was focused on the
method I had used for employee contributions in pre-QW 401k account
days. In those days did not use a transfer to the 401k account for
employer contribution as I had the tax attribute for 'Transfers In' set
to handle the pre-tax situation for my contributions.

As you point out, setting up the employer contribution in the paycheck
would work but result in register entries for zero employee
contributions. Nothing wrong with this other than 'clutter' in the
register..