To be vested in your retirement plan means that you can take that money with you when you leave your place of employment, or that you will receive it when you retire. If you are vested for a percent of your retirement plan, that type of vesting is called graded vesting. If you left the company, that percent is how much you get. With cliff vesting, you usually need to stay 5 or more years to get any benefits. If you stay the required number of years, you are 100% vested and get all that is in your retirement plan.
If you have a 401(k) paid for by your salary, you are immediately 100% vested in the part you paid for. Vesting for the part contributed to your 401(k) by your employer goes by the vesting guidelines set up by your employer.
To be vested in your retirement plan means that you would be able to take those retirement funds with you when you left your job, or collect them upon your retirement. Once you are vested in your retirement plan, those funds belong to you. You can be partially vested or fully vested, meaning you can take part or all of the funds, proportionate to the percent you are vested.
Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
The vesting period of a retirement plan is generally tied to your employment tenure. In a 401(k) defined contribution retirement plan, employers may match part of your contribution. But the vesting schedule only permits a portion of the employers match to transfer with the employee if they seek employment else where. When you're interviewing for a job, make sure you know the vesting schedule, especially if it is promoted by the employer as a significant benefit. If you leave too soon, it could become basically worthless
In Canada being vested in you retirement plan means that you have "ownership" and can take the funds with you when / if you leave the employ of the company. What you can do with the funds depends on the type of plan and your age. For example you may be required to transfer into a locked in registered plan or you may be permitted to transfer into a regular registered plan. In some circumstances you can cash in or surrender with tax consequences of course.
You company benefits person should be able to provide assistance.
If you fee I could be of assistance, please contact me.
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If you have a 401(k) paid for by your salary, you are immediately 100% vested in the part you paid for. Vesting for the part contributed to your 401(k) by your employer goes by the vesting guidelines set up by your employer.
You company benefits person should be able to provide assistance.
If you fee I could be of assistance, please contact me.