Beware of the Employer Match

Feb
25th
2008

Filed Under Retirement
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nestegg.jpgWho doesn’t like an employer who matches a percentage of your 401k contributions? It’s free money that will grow into more free money.

But be careful…I’ve found where it can screw up your cash balance amount in your 401k account in Quicken, which in turn, invalidates your Net Worth number.

My company changed their employer match formula beginning back in January. It used to be a set amount per year, but they’ve changed it to be a percentage of my salary up to a certain point, which works out well because this change increased my match by several thousand dollars. (This change in the 401k match was negated by a change in the profit sharing plan, but it still works out to my advantage.)

I noticed tonight that the cash balance in my 401k account was declining rapidly. It’s normally either $0 or the amount of my last paycheck contribution (before the equities get purchased). I began to dig through the transactions and compared them with my brokerages transactions, and I finally (it took me longer than it should) realized that the employer matches were causing the issue.

Basically, the only transactions getting pulled into Quicken were the “buys”. There was no record of the employer match “deposits”. I’m not sure why this is at this point. Next week, after I get another paycheck, I’m going to look at the downloaded transactions a little more closely.

In the meantime, I went in and manually added the employer match transactions, and my cash balance is now at $0. That makes me feel a whole lot better.



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