etworthcalculatorWhat is liquid net worth?
Liquid net worth is the part of your wealth you could turn into cash within a few days, without losing much of it, minus what you owe.
Liquid net worth = liquid assets − total debts
An asset is liquid if you can sell it fast at close to its full value. Money in checking is already cash. A house takes weeks or months to sell, and closing costs come off the price.
What counts as liquid
| Asset | Count it? | Why |
|---|---|---|
| Checking, savings, money market | Yes | You can move it today or tomorrow. |
| CDs | Yes, minus the penalty | Cashing out before the term ends costs a penalty, usually some of the interest you’d have earned. |
| Stocks, bonds and funds in a regular brokerage account | Yes | Most trades settle 1 business day after you sell. You may owe capital gains tax on the profit. |
| Roth IRA contributions | Yes | You can take out your contributions at any time, with no tax or penalty. Earnings and money converted from another IRA have stricter rules. |
| Crypto | Yes, with care | You can sell in minutes, but the price can fall a long way before the day you need the money. |
| 401(k), 403(b), traditional IRA | Usually no | Before age 59½, withdrawals generally owe income tax plus a 10% additional tax. |
| Home and other real estate | No | Selling takes weeks or months, plus closing costs. |
| Cars | No | You’d have to sell one to get the cash, and most households need theirs. |
| Business stake, private investments | No | There may be no buyer on short notice. |
Sources: IRS Tax Topics 557 and558 (the 10% additional tax),IRS Publication 590-B (Roth IRA withdrawal order), and the SEC’s T+1 settlement rule, in effect since May 28, 2024.
At 59½ or older, the 10% additional tax no longer applies. You could then count retirement balances at what you’d keep after income tax. The calculator above leaves them out, so add that amount to its total yourself. Check your plan’s withdrawal rules first, and mention it when you compare your number with someone else’s.
Liquid net worth vs net worth
Take the made-up household from our net worth calculator: $12,000 in savings, $48,000 in a 401(k), a $340,000 house and an $18,000 car, with $299,500 in debts, most of it the mortgage. Their net worth is $118,500.
Only the $12,000 in savings is liquid. Subtract the same $299,500 in debts and their liquid net worth is −$287,500.
That’s normal for a homeowner a few years into a 30-year mortgage. Their savings couldn’t pay off every debt today, and the loan doesn’t ask them to.
Do you subtract your mortgage?
It depends on who’s asking. American Express defines liquid net worth as cash and cash-like assets“after subtracting all debt,”and NerdWallet’s guide also subtracts your debts. This calculator follows that definition, so your mortgage counts in full.
Some brokerage forms describe something narrower. Fidelity’soptions applicationdefines “Estimated Liquid Net Worth” as “the amount of your cash and other assets that could be sold and easily converted to cash.” The total net worth line beside it says “minus any outstanding debt”; the liquid line doesn’t. Vanguard’s options form says “cash, securities, etc.” and notes that liquid net worth shouldn’t exceed total net worth. Neither tells you to subtract a mortgage.
On a form, follow the wording printed next to the line. If there isn’t any, ask the firm which version it wants. The calculator shows both numbers: liquid assets on their own, and liquid net worth after debts.
When liquid net worth matters
- If your income stops. Liquid assets are what you’d live on. Divide them by what you spend in a month to see how many months you could cover.
- Opening an options account. Brokers ask for it on the application, as in the Fidelity and Vanguard forms above.
- Big near-term costs. A down payment, tuition bill or tax payment comes out of liquid money, however high your total net worth is.
Work out the rest
The net worth calculator counts everything, including your home and retirement accounts. Then see how your total compares with median net worth by age. To watch both numbers change month to month, see our net worth tracker app.
Last updated