We define liquidity as money that can be in your savings or checking account next day, no penalty. If all of your money were liquid, then it’s not working for you. If all of your money is locked up, that is equally silly. We try to have about 40% of your invested funds next day liquid, so when life happens, you are able to deal with it and have liquidity without destroying your plan. The reason liquidity is a big deal is because many financial planners will lock up your funds, and we want to warn you about that.
What happens if your roof leaks, your car dies, your water heater breaks, or your kids call for money? We know that life happens, and we try to make sure that you have the liquidity that you need to live life and not disrupt your retirement plan.