Definition
A rule in some retirement plans where you become fully entitled to employer contributions all at once after a certain period, instead of gradually.
What to consider
- Mark your calendar for when you’ll fully own employer contributions.
- This milestone can help you decide when to stay or move on.
- It’s a good indicator of the value of sticking with a job.
Real world scenarios
- Diane’s retirement plan fully vests after three years at her tech firm, granting her complete ownership of employer contributions on that anniversary date.
- Leaving the company one month before hitting the vesting cliff means Rick forfeits all unvested funds.
- Andrew negotiates vesting terms in his employment contract to align with his future career moves.
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