Originally Posted by
Tybee
Yes and no?
They have to pay the taxes on them if they pull them out. So the value is not the same as the number on the page.
It's more liquid than real estate.
Why is the idea of liquidity important in this discussion? Wouldn't one be more concerned about what effect pulling out the money from the 401k (or IRA) would have on the person's future retirement years?
I could sell stuff in my IRA and get cash within a few days. So that is more liquid than many things, but not like writing a check, and if she is buying a house, bank may not consider it liquid because they may discourage her cleaning out the 401k. I have taken cash out of a 401k to buy a house, but I had to do it through the benefits people--I don't know what rules her 401k has.