Can I Retire? Series — Part 4 of 12
“I’m worth two million dollars.”
Maybe. But can you retire on it?
Net worth and investable assets aren’t the same thing. Your net worth includes everything you own minus everything you owe. Your investable assets are the subset of that wealth that can actually generate income and fund your retirement.
The distinction matters — a lot. Someone with $2 million in net worth might have $1.5 million in investable assets, or they might have $400,000. Their retirement readiness is completely different.
The calculator on caniretire.app asks for investable assets, not net worth. Here’s why — and how to figure out your real number.
The Problem with Net Worth
Net worth feels good. It’s the big number. It includes your house, your cars, your stuff. Add it all up and you feel wealthy.
But net worth doesn’t pay bills.
Your house might be worth $600,000. Great. But unless you’re planning to sell it and rent, or do a reverse mortgage, that $600,000 isn’t funding your groceries. It’s giving you a place to live. That’s valuable — but it’s not income.
Same with your car. It might be worth $30,000, but you need it to get around. You’re not liquidating it to pay for dinner.
And that Ken Griffey Jr. rookie card? The vintage guitar? The jewelry? Sure, they have value. But they’re not reliably convertible to retirement income, and their prices fluctuate based on collector markets, not fundamentals. They’re nice to have. They’re not a retirement plan.
What Counts as Investable
Investable assets are things that compound, generate income, or can be systematically converted to cash to fund your life. Here’s what belongs on the list:
Retirement accounts. Your 401(k), 403(b), 457, traditional IRA, Roth IRA, SEP-IRA, Solo 401(k) — all of it. This is the core of most people’s investable assets. These accounts exist specifically to fund retirement.
Brokerage accounts. Taxable investment accounts with stocks, bonds, ETFs, mutual funds. Money you’ve invested outside of retirement accounts. Fully liquid and fully investable.
Cash and cash equivalents. Savings accounts, money market funds, CDs, Treasury bills. It’s not exciting, but it counts. If you’re holding $50,000 in cash as an emergency fund, that’s part of your investable base.
HSA funds (if you plan to use them in retirement). Health Savings Accounts are triple-tax-advantaged and can be used for medical expenses tax-free. Many people treat their HSA as a stealth retirement account. If that’s your plan, count it.
Rental property equity (maybe). This one’s conditional. If you have rental properties generating reliable income, that income counts (we’ll talk about it in Part 6). The equity itself is trickier — you can’t spend equity without selling or borrowing against the property. If you plan to sell rentals to fund retirement, include the expected net proceeds. If you plan to hold them for income, don’t double-count by including both the equity and the income stream.
What Doesn’t Count
Here’s what to leave off the list:
Your primary residence. You need somewhere to live. Unless you’re planning to downsize and invest the difference, or do a reverse mortgage, your home equity doesn’t fund retirement. It provides shelter. That’s not the same thing.
Vehicles. Cars depreciate. You need them for transportation. They’re not investments.
Personal property. Furniture, electronics, clothes, household items. They have resale value, technically. But you’re not funding a 30-year retirement by selling your couch.
Collectibles. Art, wine, coins, sports memorabilia, vintage watches. These can be valuable. They can also be illiquid, volatile, and hard to sell at fair prices. The market for your specific collection might be thin. The Ken Griffey Jr. rookie card is not a retirement asset. Sorry.
Jewelry. Same problem as collectibles. Emotional value often exceeds resale value. Unless you’re planning to sell it, leave it off the list.
Business equity (usually). If you own a business, it might have substantial value. But that value is only investable if you can sell the business or extract reliable distributions. If you’re counting on selling your business to fund retirement, you need a realistic valuation and a realistic exit plan. Most small business owners overestimate what they can actually get.
The Hard Conversation About Your House
This is where people push back. “But my house is my biggest asset!”
It might be. And it might be a great financial decision. A paid-off house means no mortgage in retirement — that’s a real reduction in your spending needs. Wonderful.
But the equity locked in your house isn’t paying for groceries, healthcare, travel, or any of the other things you need money for. It’s providing housing. If you want to convert it to investable assets, you have three options:
Sell and downsize. Sell the $600,000 house, buy a $350,000 condo, invest the $250,000 difference. Now that $250,000 is investable. The rest still isn’t.
Sell and rent. Sell the house entirely and rent. Now all the equity is investable — but you’ve added rent to your expenses, so your spending number goes up.
Reverse mortgage. Borrow against the equity while staying in the home. This converts equity to income, but it has costs and complexity, and it reduces what you leave to heirs.
If none of those are your plan, your home equity isn’t investable. It’s shelter. Plan accordingly.
How This Connects to the Calculator
The caniretire.app calculator asks you to enter your assets across three buckets: taxable accounts, traditional (pre-tax) accounts, and Roth (post-tax) accounts. We’ll dig into those buckets in Part 5.
For now, the important thing is this: only enter assets that are actually investable. Don’t inflate your numbers with home equity, car values, or collectibles. The calculator is trying to tell you whether your investments can sustain your withdrawals over 30+ years. If you feed it fantasy numbers, you’ll get fantasy results.
The calculator is brutally honest. It will tell you uncomfortable truths. But it can only do that if you’re honest with it first.
Your Homework
Make two lists.
List 1: Everything you own with significant value. Include your home, cars, retirement accounts, brokerage accounts, cash, collectibles — all of it. This is your net worth inventory.
List 2: The subset of List 1 that qualifies as investable. Retirement accounts, brokerage accounts, cash, HSAs, and anything else you’re actually going to convert to retirement income.
Total up List 2. That’s your investable assets — the number that matters for retirement planning.
If there’s a big gap between List 1 and List 2, that’s information. It might mean you’re more house-rich and cash-poor than you realized. It might mean you need to think about whether to downsize. It might mean your retirement date is further out than you hoped.
In Part 5, we’ll break down the three buckets of investable assets — taxable, traditional, and Roth — and explain why the calculator treats them differently. Spoiler: not all retirement dollars are created equal.
Next: Part 5 — The Three Buckets
