Do you have a 401(k) account for your retirement? Are you vested yet? Find out if you are fully vested in your retirement account before you move on to your next job. If you don't, you could lose hundreds or even thousands of dollars in contributions from your employer.
Vesting just means the amount of your account's assets that you can't lose. In other words, everything you put into your 401(k) plan, including any money you roll over, is always yours to keep.
If your employer puts money into your plan, the plan includes a schedule for when the employer's money will count toward your plan. This schedule adds a non-forfeitable percentage to the employer's contribution for each year of service, up until you have 100 percent ownership of the employer's contribution and are fully vested.
The dates for vesting depend on the employer. A sample plan could say that after three years of service, you are fully vested. After the first year, the plan may make you one-third invested. After the second year, you could be two-thirds invested. On your third anniversary, you would be fully invested and entitled to all of your employer's contributions.
When you leave a job, you always get to keep your contribution and any rollover funds. Depending on your employer's vesting schedule, though, you may only be able to keep a small portion of the money they put in. If you quit before you have full ownership, you could lose a lot of money. Thus, it behooves you to calculate whether the financial benefits of the new job outweigh any potential loss of employer contributions to your 401(k) account.
