Updated 2026-03-30
401(k) Vesting Schedule: When Your Match Is Truly Yours
Understand cliff, graded, and immediate vesting - and what it means for your money
Your own 401(k) contributions are always 100% vested, but employer match contributions often vest over time. Understanding your vesting schedule is critical before changing jobs.
Types of Vesting Schedules
| Type | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 |
|---|---|---|---|---|---|---|
| Immediate | 100% | 100% | 100% | 100% | 100% | 100% |
| 3-Year Cliff | 0% | 0% | 100% | 100% | 100% | 100% |
| 6-Year Graded | 0% | 20% | 40% | 60% | 80% | 100% |
| 4-Year Graded | 25% | 50% | 75% | 100% | 100% | 100% |
What Counts Toward Vesting
A year of service typically requires 1,000+ hours worked. Part-time employees may vest more slowly. Some plans count service from date of hire, others from the start of the plan year. ERISA limits cliff vesting to a maximum of 3 years and graded vesting to 6 years.
Frequently Asked Questions
Unvested employer contributions are forfeited back to the plan. This money may be used to reduce future employer contributions or allocated to remaining participants. Your own contributions are always 100% vested regardless of when you leave.
A layoff does not change your vesting schedule. You keep whatever percentage you have vested at the time of separation. Some plans have break-in-service rules where a gap resets partial vesting, but this is less common under ERISA rules.
Pavlo Pyskunov
Managing Director & Investment Fund Director
Pavlo Pyskunov analyzes employer-sponsored retirement plans using IRS publications and DOL Form 5500 filings, helping workers maximize their 401(k) savings through data-driven guidance.
Last updated: 2026-03-30