Yes, net worth includes retirement accounts. Every balance in a 401(k), IRA, 403(b), or similar plan is an asset, and you subtract what you owe from what you own to get your net worth. The catch is valuation: the number on your statement is not necessarily what those dollars are worth to you, because taxes and, sometimes, an early-withdrawal penalty sit between you and the cash.
Which Retirement Accounts Belong on the Asset Side
If you own it, it counts. That includes a 401(k) through an employer, a Traditional or Roth IRA you opened yourself, a 403(b) through a nonprofit employer, and plans for the self-employed.1Internal Revenue Service. Types of Retirement Plans You hold legal ownership, you control the investments, and the money can eventually be withdrawn, transferred, or inherited.
The fact that these funds are restricted until a certain age does not remove them from your net worth. Home equity is similarly illiquid, and no one leaves a house off the list. Retirement accounts represent real economic value you have accumulated, even when reaching that value takes time or costs money.
Why the Statement Balance Can Overstate What You Have
Not every retirement dollar is worth the same after tax. This is the single most important thing to understand when you put a retirement account on your net worth statement.
Roth accounts have already been taxed. Qualified distributions from a Roth IRA are not included in gross income, so a $100,000 balance is worth $100,000 in spendable money once the distribution qualifies.2Internal Revenue Service. Publication 590-B – Distributions From Individual Retirement Arrangements Qualifying generally means the account has been open at least five years and you are at least 59½, disabled, or covered by another exception.3Internal Revenue Service. Traditional and Roth IRAs
Traditional 401(k) and Traditional IRA balances have never been taxed. Every dollar you eventually pull out will be taxed as ordinary income at whatever bracket you land in that year. So the balance on the statement overstates the spendable amount, and how much it overstates depends on your future tax rate.
How to Discount Pre-Tax Balances for a Realistic Number
Many financial planners apply a haircut to traditional retirement balances to reflect the tax that is coming.
For 2026, the 22% federal bracket applies to single-filer income above $50,400, and the 24% bracket kicks in above $105,700.4Internal Revenue Service. Tax Inflation Adjustments for Tax Year 2026 If you expect to withdraw in one of those brackets, a $100,000 traditional IRA represents roughly $76,000 to $78,000 in after-tax spending power, before any state income tax. A discount somewhere in the 20% to 35% range on pre-tax balances is a reasonable planning assumption depending on your expected federal and state rates.
Withdrawing from a traditional account before age 59½ triggers an additional 10% penalty on top of ordinary income tax.5Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts For someone in the 24% bracket who also pays the penalty, that $100,000 balance could shrink to around $66,000. If you are under 59½ and want a picture of what your retirement dollars are worth to you right now, the discount should be that much steeper.
Count Only the Vested Portion of an Employer Match
If your employer matches your 401(k) contributions, part of that match may not be fully yours yet. Most employer-sponsored plans use a vesting schedule that gradually increases your ownership of the employer’s contributions over several years. Leave before you fully vest, and you forfeit the unvested piece.
So on your net worth statement, count the vested balance, meaning the amount you would actually receive if you separated from your employer today. Your own contributions and their earnings are always 100% vested. The employer match portion depends on your plan’s schedule, and your account statement or plan administrator can confirm the current vested figure.
Related Items Readers Often Ask About
Health Savings Accounts
An HSA balance is an asset and belongs on your net worth statement. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are also tax-free. After age 65, you can withdraw HSA funds for any purpose, though non-medical withdrawals are taxed as ordinary income the way a traditional IRA is. HSAs have no required minimum distributions, so the money can stay invested indefinitely. For 2026, the contribution limits are $4,400 for self-only coverage and $8,750 for family coverage.
Pensions
A defined-benefit pension is a future income stream, not a lump-sum balance. To include it on a net worth statement, planners typically convert expected monthly payments into a present value using a discount rate around 4% to 5%, adjusted for your expected retirement age and life expectancy. If your plan offers a lump-sum buyout, that figure gives you a ready-made estimate.
Social Security
Social Security benefits are generally not included in a personal net worth calculation. It is a government benefit rather than an asset you own, and you cannot sell, transfer, or borrow against it. Some people calculate its present value separately to understand its role in their retirement, but the standard convention leaves it out of net worth.
Inherited Retirement Accounts
An inherited IRA or 401(k) counts as an asset. Distribution rules affect its long-term value: most non-spouse beneficiaries who inherited from someone who died in 2020 or later must empty the account within 10 years of the owner’s death. Forced distributions from a traditional inherited IRA are taxable income, so the same tax discount applies, possibly more aggressively given the fixed timeline. Spouses, minor children, disabled individuals, and beneficiaries within 10 years of the deceased owner’s age may qualify for slower schedules.6Internal Revenue Service. Retirement Topics – Beneficiary If the deceased owner made nondeductible contributions, that basis carries over to you and reduces the taxable portion of future withdrawals.2Internal Revenue Service. Publication 590-B – Distributions From Individual Retirement Arrangements
When the Number You Report Actually Matters
Retirement balances show up in several situations where the figure has real consequences.
In a divorce, retirement contributions and investment growth that occurred during the marriage are generally treated as marital property, even if the account is only in one spouse’s name. Dividing a 401(k) or pension typically requires a Qualified Domestic Relations Order, which lets the receiving spouse roll the funds into their own IRA without triggering taxes or an early-withdrawal penalty.7Internal Revenue Service. Retirement Topics – QDRO
For accredited investor status, one qualifying path is net worth above $1 million individually or with a spouse, excluding your primary residence.8U.S. Securities and Exchange Commission. Accredited Investors Retirement balances count toward that threshold, and for many people they are the assets that clear it.
For estate planning, retirement accounts are part of your taxable estate. The federal estate tax exemption for 2026 is $15,000,000 per person, or $30,000,000 for a married couple, with amounts above that taxed at rates up to 40%.4Internal Revenue Service. Tax Inflation Adjustments for Tax Year 2026 Large traditional balances can be hit twice: income tax when the beneficiary takes distributions, and estate tax if the estate exceeds the exemption.
Bankruptcy filings require disclosing every retirement account balance, but federal law generally shields those funds from creditors. Employer-sponsored plans that qualify under ERISA get unlimited protection; Traditional and Roth IRAs are capped, currently at $1,711,975 as of April 2025, with rollovers from employer plans not counting against the limit.9Office of the Law Revision Counsel. 11 USC 522 – Exemptions
Track Gross Net Worth and a Tax-Adjusted Version
Gross net worth adds everything at face value: home equity, retirement balances, cars, investments. Liquid net worth is what you could actually access quickly without major penalty or loss. Retirement accounts sit awkwardly between the two: real assets, but expensive to reach before retirement age.
A practical approach is to track both. Keep a gross net worth number with full retirement balances for the complete wealth picture, and keep a tax-adjusted version that discounts pre-tax accounts by your expected marginal rate. Roth balances need no discount when qualified withdrawals are on the table. Traditional balances deserve a 20% to 35% reduction depending on your bracket, plus more if you are under 59½ and the 10% penalty would apply.