Tracking your retirement fund in PocketSmith
Learn about the different options for adding your retirement funds and tracking contributions in PocketSmith 💰📈
Employer-sponsored retirement funds such as Kiwisaver, Superannuation, Pension schemes, and 401(k) are different to regular investment accounts as the contributions are usually processed as automatic deductions from your paycheck, and therefore do not appear as expense or transfer transactions within your bank account.
Depending on whether you add your retirement fund as a bank feed, an offline account, or as an asset, we'll look at the best ways to manage and track your contributions in PocketSmith as well as how to account for any losses or gains.
In this user guide
Options for adding your retirement fund to PocketSmith
There are three ways that a retirement fund can be added to PocketSmith:
- As a bank feed account (if available)
- As an offline account
- As an asset
Which option is right for me?
The option that's right for you depends on a number of factors, including whether a bank feed is available for your retirement fund and whether or not you want to import the transactions into PocketSmith in order to include them in your budgets and reporting.
We've compiled a brief overview of each option below. Read on to learn more.
Adding your retirement fund as a bank feed account
If a bank feed is available, we recommend adding your investment account as a bank feed account with the 'track balance changes' option enabled.
The advantages of adding your retirement fund as a bank feed account include:
- the current and past balance of the fund will always be up to date
- transactions can be set up to not be imported, and the balance will still remain accurate
- gains and losses are included in balance-changes automatically
Adding your retirement fund as an offline account
If there is no bank feed available for your retirement fund, but you'd still like to import or add the transactions within the account for reporting purposes then you may like to add your retirement fund as an offline account.
The advantages of adding your retirement fund as an offline account include:
- can use bank files to import the majority of transactions
- allows you to include the transactions in your income and expense reporting
However, please note that manual transactions reflecting any gains or losses will need to be added periodically in order for the current balance to be accurate.
Adding your retirement fund as an asset
This option may be suitable for you if you would like your retirement fund included in your net worth and you want to forecast its growth, but you don't want to report on the gains or losses as part of your Income & Expense Statement, or don't want the transactions from the account cluttering up your day-to-day income and expenses.
- no need to add or import transactions, and therefore no need to worry about how they will affect your income & expense reporting
- use a repeating budget to reflect your contributions. The budget will automatically update the asset balance accordingly.
Please note that balance adjustments reflecting any gains or losses will need to be added periodically in order to keep the balance up to date.
Managing your retirement fund as a bank feed account
Adding a bank feed account
If bank feed support is available for your retirement fund provider, and you decide you would like to add the fund to your PocketSmith as a bank feed account, then you can learn how to do this here: Adding a bank feed and establishing your accounts
Note
If you add an account with the 'Investment' account type from March 6, 2024, onwards, the Track Balance Changes option will automatically be enabled. The same applies if you have changed an account to the 'Investment' type.
Your Retirement account may automatically come through with this account-type, and if so, you won't need to enable this option 🙌
However, when appropriate (see: When to use Track Balance Changes), you can change any account type to use the Track Balance Changes option. Read on to learn how!
How to activate the 'track balance changes' option
Enabling the ' track balance changes' option will allow you to track historic balances for accounts where no transactions are imported, or for investment or retirement accounts where the balance is also affected by gains and losses
With 'track balance changes' enabled, when the balance changes, a balance record is created and saved in the forecast calendar. These records will be used when displaying the historical balances for this account.
If the 'track balance changes' option is not automatically enabled already, you can easily enable this from the Account settings on the Account Summary page under 'Other settings'.
For all the detail on how to enable 'Track Balance Changes' see: Steps to enable Track Balance Changes for an account
Categorizing your transactions
Once your account has been added and the transactions imported, you'll need to determine how you'd like to report on any transactions that are imported and categorize them accordingly. Note that some retirement funds won't import any transactions at all.
If you'd like the contributions to show as income on your PocketSmith reports and budget figures, then you can assign the transactions to a regular income category, eg. Retirement contributions.
However, if you don't want your retirement contributions to show as part of your regular income and expense reporting or budget figures, then you'll just need to assign the transactions to a transfer category. You can learn how to create a transfer category here: Steps to create a transfer category.
Similarly, any expense transactions can be assigned to their own category, eg. Retirement fund - fees. If you'd like to hide these transactions from your regular reporting, you'll just need to edit the category to be a transfer category.
Budgeting & forecasting
Add a repeating income budget to your Retirement fund account in order to reflect your regular contributions and include them in the account's forecast.
For more detail on creating a budget please see: Creating a new budget
Accounting for gains/losses
Gains and losses are generally not recorded as transactions within a retirement fund. However, these will be included within your account balance automatically with the 'track balance changes feature' enabled.
Managing your retirement fund as an offline account
Creating an offline account
If you'd like to add your retirement fund as an offline account, you can choose to use bank files to import your transactions. If bank files are not available you can add transactions manually instead.
Using bank files:
To learn how to add an offline account using a bank file, please see Importing bank files on the Account Summary page.
Manually: If you wish to add all transactions manually, then you can learn how to create an offline account here - Create a transaction account that does not use bank feeds or bank files.
Once the account has been added, you're ready to add your transactions. We've got all the detail here: Manually add transactions to my account
Categorizing your transactions
Once the transactions have been imported or added, you'll need to determine how you'd like to report on the transactions and categorize them accordingly.
Including retirement fund transactions in your PocketSmith reporting:If you'd like the contributions to show as income on your PocketSmith reports and budget figures, then you can assign the transactions to a regular income category, eg. Retirement contributions.
Similarly, any expense transactions can be assigned to their own category, eg. Retirement fund - fees.
Excluding retirement fund transactions from your PocketSmith reporting:If you don't want your retirement contributions to show as part of your regular income and expense reporting or budget figures, then you'll just need to assign the transactions to their own transfer category. You can learn how to create a transfer category here: Steps to create a transfer category.
Similarly, any expense transactions can be assigned to their own transfer category, eg. Retirement fund - fees.
Budgeting and forecasting
Add a repeating income budget to your Retirement fund account in order to reflect your regular contributions and include them in the account's forecast.
For more detail on creating a budget please see: Creating a new budget
Accounting for gains/losses:
The balance for offline accounts is based on the starting balance set for the account and the transaction data.
Because gains and losses do not show as transactions within a retirement fund, you'll need to periodically add manual transactions in order to update your balance. To learn how to add manual transactions please see: Manually add transactions to my account
Managing your retirement fund as an asset
Adding an asset
If you decide that you'd like to add your retirement fund as an asset, you can learn how to do this here: Adding an asset to Net Worth
Tracking your contributions using a budget
Once the asset has been added, you're able to add a repeating income budget to reflect any contributions made to your retirement fund. The budget events will automatically update your balance accordingly.
To do this, you'll need to create a new category, eg. Retirement contributions. Because assets and liabilities do no have transactions assigned to them, it's best to set this category up as a transfer category so that your overall budgeted figures are not affected.
Next, you'll need to create an income budget for your Retirement contributions category. To create a budget against an asset, select the asset from the drop-down for the option 'What account's this budget for'. For more detail please see: Creating a new budget
Updating the balance to account for gains/losses
In order to account for any gains or losses to your retirement fund, you'll need to periodically add a manual balance adjustment as outlined here: Updating the value of an asset or liability from the Calendar page