Is a 401(k) an asset?

Your 401 (k) is an investment account that holds securities and cash. Any securities in this portfolio are by definition assets because, unless they are something like an underwater short position, they can be converted to a positive sum of money. Cash that you own is always an asset.

Is a 401(k) a liquid asset?

Liquid assets are cash-on-hand, investment holdings or any tangible property that can be instantly converted to cash without losing value. Individual retirement accounts, or IRAs, and 401 (k)s are retirement savings accounts designed to hold your money until retirement and technically are not liquid assets, unless you have reached retirement age.

What is a 401(k) & how does it work?

A 401 (k) is a retirement account set up by an employer on behalf of their employees. Although maintained by your employer, your 401 (k) belongs to you as an individual. This allows you to make choices about the account’s assets, take loans and early withdrawals, roll it over to a Roth IRA, and move it from one workplace to another.