401k Account setup suggestins

[Boris Goldowsky]

On Thursday, January 30, 2003, at 03:46  PM, jack rilllman wrote:

> I am trying to get my feet wet using GNUCash by tracking my 401k and 
> IRA
> accounts before switching everything over from Quicken.
>
> What I am looking for is suggestions on how to set them up.

Others have posted to this list explaining the Right way to do this.

I just want to add a note showing that Gnucash can be flexibly used for 
accounts where you don't care so much about accounting for every 
transaction.  In particular, 401k plans have rather mild recordkeeping 
requirements - unlike a regular stock account, you don't need to know 
the cost basis of every share you own for tax purposes (as tax-deferred 
assets, the basis is assumed to be zero...)

So for certain accounts, here's a short cut method:

   set the 401k up as an Asset, Bank, or Cash account
   transfer the correct $ amount in from each paycheck
   when you get the quarterly statement:
     add a transaction for the company matching deposits (from an income 
account)
     (optional) add a transaction for "Unrealized Gains/Losses" (another 
income account).

So Gnucash, in this case, has no notion of what funds you may own 
within the 401k account, but you can keep track of what you need to 
know for tax purposes, for calculating your net worth, and so forth.

Obviously if you have the time and inclination to track things in more 
detail, you get more benefits on the reporting side.  But this is 
better than just putting the statements in a file if your time is 
limited.

Bng