You open your 401(k) app and see $48,000. You’ve been at the company two and a half years, and a recruiter just called. Here’s the question almost nobody asks before saying yes: how much of that $48,000 actually leaves with you?

If your employer matches your contributions, the honest answer might be less than you think. The gap is called vesting — the schedule that determines when your employer’s contributions become legally yours — and misjudging it by a few months can cost thousands of dollars. The rules are more generous than many people fear, and more specific than most people know.

Your own money is always yours

Start with the reassuring part. Every dollar you put in from your own paycheck — your salary deferrals — is 100 percent vested immediately, along with whatever those dollars earn. Federal law doesn’t allow a plan to claw back your own contributions, ever. The IRS spells this out in its vesting rules for retirement plans.

Vesting only applies to money your employer puts in: matching contributions, profit-sharing, or other employer deposits. That’s the pile with strings attached. So the first thing to do with any 401(k) statement is find the line that separates “your balance” from “your vested balance.” Most providers show both; if yours doesn’t, the plan administrator has to tell you.

The two schedules the law allows

Employers can’t make you wait forever. Federal law caps how slow a vesting schedule can be, and for 401(k) matching contributions there are two permitted shapes, described in the IRS’s guidance on vesting schedules for matching contributions:

Cliff vesting: you’re 0 percent vested until you complete three years of service, then 100 percent vested all at once. It’s all or nothing — leave at two years and eleven months and the entire match is forfeited; stay past the third anniversary of your service date and it’s all yours.

Graded vesting: you vest gradually — at minimum 20 percent after two years of service, then 20 percent more each year until you hit 100 percent at six years. Leave after four years on the slowest legal schedule and you keep 60 percent of the employer money.

Those are the floors, not the norms. Plans are free to be faster, and many are: immediate vesting is common, and certain safe-harbor plan designs require employer contributions to be fully vested right away. But a plan cannot legally be slower than the three-year cliff or the six-year graded schedule.

What “a year of service” actually means

Vesting is counted in years of service, and a year of service generally means a 12-month period in which you worked at least 1,000 hours — roughly half time. The Department of Labor’s plain-English guide, What You Should Know About Your Retirement Plan, walks through how service is counted and what your plan must disclose.

Two details trip people up. First, many plans count service from your hire date, not from when you joined the 401(k) — so you may be further along than you assume. Second, part-time work can count: at 1,000 hours a year, a 20-hour-a-week employee is earning vesting credit. The exact counting method is in your plan’s Summary Plan Description, a document you’re entitled to request at any time.

The math of leaving too early

Say you earn $70,000 and your employer matches 50 cents on the dollar up to 6 percent of pay — about $2,100 a year if you contribute enough to get the full match. On a three-year cliff, walking out the door at month 35 forfeits roughly $6,300 of employer money plus its investment growth. Waiting one more month makes it yours.

That doesn’t mean you should turn down a great offer over a vesting date. It means the vesting date belongs on the same list as salary and start date when you negotiate. A start date pushed back three weeks, or a signing bonus that covers the forfeited match, is a routine ask — but only if you know your number before you resign. Forfeited money doesn’t follow you; it typically goes back into the plan to offset employer costs.

How to check your own schedule tonight

Three places to look, in order of speed. Your 401(k) provider’s website or app: look for “vested balance” or a vesting percentage next to the employer-contribution bucket. Your Summary Plan Description: search the PDF for “vesting” and you’ll find the exact schedule. Or simply ask HR or the plan administrator which schedule applies and what your current service count is — they’re required to know.

While you’re in there, note your service anniversary date. If you’re anywhere near a cliff, that date is worth real money.

Three fine-print rules worth knowing

First, vesting can accelerate to 100 percent regardless of schedule in certain events — commonly when a plan is terminated, and when a participant reaches the plan’s normal retirement age while employed. Second, if you leave and later come back, prior service often counts again, though the break-in-service rules are technical enough that it’s worth asking the administrator directly rather than guessing. Third, unvested money never shows up in a rollover: when you leave a job, only the vested portion moves to your IRA or new plan, which is why the rollover check is sometimes smaller than the balance you remember.

None of this is a reason to fear the match — free money on a schedule still beats no free money. It’s just a reason to read the schedule. The balance on the screen is a promise; the vested balance is the fact.

This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.