Vesting Schedules: Why the Timing of Leaving a Job Can Cost You Thousands
Bottom line
Your employer promised you stock or retirement contributions. but you may not own them yet.
In this guide
What it is
Vesting is the process of earning ownership of money your employer contributes to your retirement account or gives you in company stock. Until you are fully vested, that money is not legally yours.
By the numbers
Your employer contributes $3,000 a year to your retirement account. On a 4 year vesting schedule, if you quit after 2 years, you only keep $1,500 of that. the other $1,500 goes back to the company.
How it works
Your employer sets a schedule. for example, you earn 25% ownership per year. Each year you stay, more of their contributions become yours permanently. Leave before the schedule completes and you forfeit whatever percentage has not vested yet.
The catch
Your own contributions are always 100% yours from day one. vesting only applies to what your employer puts in. Most people assume all the money in their account belongs to them, so they quit without checking and never realize what they left behind.
What to check next
Log into your HR or benefits portal this week and search for your vesting schedule to see exactly what you own today.
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