Do 401k contributions need to be invested? Can it be left as cash in the account?

Question

As title. Since the market is a bit volatile now, wondering if I can keep the 401k contributions as cash and invest them later. Or does it necessarily need to be invested in one of the options that the brokerage provides? Thanks!

Answer 1

401(k) accounts are required to have a number of choices. There will be a fund that's low low risk, likely made up of T-Bills of very short duration. Not quite a money market fund. It may have a zero return if rates shoot up quickly, but a tiny risk of less than zero in a given year.