Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Does anyone know of a good, simple-to-use calculator or spreadsheet that will let me figure a true (net) rate of return in my 401k investments?

What I'm looking for is a downloadable spreadsheet that will let me input starting values for each investment allocation and/or the beginning balance of the account, add in the actual weekly contribution amounts (incl. employer match) over a specified time frame (month, qtr, yr, from inception), input the current balance(s) for each investment selection, and have it calculate the true return %, in both absolute and annualized terms.

Alternatively, if anyone can come up with the proper equation, I could use that to figure it out by hand. Any help is greatly appreciated.

My quarterly reports show rates of return, but they aren't net of expenses and the required disclosure isn't always clear.
Print the post Back To Top
No. of Recommendations: 0
The actual return in this situation gets very complicated. I would suspect that a precise calculation is more trouble than it is worth.

However, if you made 12 equal monthly contributions to the account and took no distributions, you can approximate the sum of those by treating the accumulating value as a triangle.

So suppose the account is worth $10K on Jan 1 and you make contributions of $100 per month. At end of the year cost basis is $11200. Your total gain is final value of the account minus $11200. I would calculate return as total gain X 100/(10,000 + 6x100). This is approximate but not too complicated.

You can do a more detailed calculation using the number of shares purchased each month and 11/12 year as the time for January's investment, 10/12 for Febs, . . . , 0/12 for Decembers.

Of course for large accounts, the contributions may not matter so much and can probably be ignored. For small accounts the first approximation works well enough.

You mention expenses, but that does not directly affect the calculation. Its all about your investment and final value at end of the year.
Print the post Back To Top
No. of Recommendations: 0
Just to clarify, are you sure your statements don't show performance net of expenses?

I can honestly say that I have never seen a 401k statement that reported gross performance before fees.

The true (net) rate of return in the most simple form would be your starting balance, plus contributions (your statements should reflect this by position), subtracted from the final value, then solve for percent change. If you wanted something more specific, you would need to enter the purchase price and shares for all additions and then calcuate their individual performance, then average the whole proportionally. All that is rather complicated and I am not sure if it would be worth your time. That being said, here are a few resources that come close to simplifying it.
Also search for Excel XIRR

Lastly, some statements (and companies) will calculate all this for you. You might try contacting the firm that manages your 401k. What you want to ask for is your "personalized" rate of return.
Print the post Back To Top
No. of Recommendations: 0
Thanks for the help, guys. I guess I should've been clearer. The quarterlies do show rates of return which they say are "net of expenses", but I was looking for an approximate way to double check. Also, the rates quoted don't account for the 401k fees imposed by the plan administrator.

My contributions aren't equal dollar amounts per month. They are figured on a percentage (currently 20%) of gross earnings each week, that's what makes the math tricky. My pay can best compared to that of a commission salesperson. I'm a truck driver paid by the mile and the number of miles I get per week varies quite a bit. In general, I'm putting between $150-$225 each week aside.

For simplicity's sake, could establishing the effectiveness of my asset allocation be as simple as setting up a spreadsheet with an A/B comparison with the associated index fund? For example: calculating my Rate of Return for an individual S&P stock against the performance of an equal investment in a S&P Index Fund?

I suppose I could just take 20% of my average yearly salary and break that down into quarters, but I was hoping there was an easy way to calculate it more accurately. Or am I just trying to micro-manage too much? The size of my nest egg is such that the short term swings in the market aren't really that big a deal, dollar-wise.

Thanks for taking the time.
Print the post Back To Top
No. of Recommendations: 1
Since you are limited by the options in your 401k (e.g. no means to simply invest the money some place else via payroll deduction for retirement), you are likely putting too much effort into trying to micro-manage it. With a different amount going in each week, you literally would need to calculate the returns for every single deposit.
Print the post Back To Top
No. of Recommendations: 2
Quicken does this calculation. I enter (actually download from Fidelity) each transaction in each of our investment accounts. Quicken keeps track of the ROI for each transaction and then also annualizes it on an investment performance report.

If you want to keep track of your investments at adetailed level, I don't think that you can beat Quicken. Make sure you get the Premier edition as I think that is the edition that tracks investments.

Print the post Back To Top
No. of Recommendations: 0
I agree - Quicken -
and I think it's been invaluable - I recently wanted to reduce my investments in stocks and move it to bonds.

In the Portfolio view, I could display each fund, transaction by transaction - with dollar and precentage gains/losses shown for each transacaction (lot).

Some funds had gained much more than my 401k statements indicated, maybe because I had purchased them over 3-5 years, yet the statements only calculate return for up to 2 years.

This helped me decided whether to sell all or partial amounts of the funds and lock in gains.

Of course, it will take a while to build up the history of your 401k - but once it's there, you have a lot of information available to you.
Print the post Back To Top