Vesting Period: Check It Or Lose It
I read an article or two about retirement plans. One great piece of advice is to contribute at least enough to get your company’s maximum match. Sadly most of my company’s never matched. This weekend I stumbled upon my company’s employee handbook.
I don’t have company matching, but I do have a vesting period. After a set amount of service years to the company, your retirement funds will become appropriately vested. In my case, after one year of service, I am entitled to one third of my funds. After two years, two thirds, and I will be fully vested after three years of service. It’s good I became aware because I was fully vested at my previous job only six months in. I can understand the company’s position as it sifts out short timers and gives employees an incentive to stick it out for the long haul. Training and the hiring process is quite costly.
Why do I bring this up? If you are not fully aware of your retirement situation at work, you may be leaving money on the table. If your job clearly is no longer a good fit, then by all means, move on to greener pastures. However, if you are on the fence, don’t forget your unvested retirement funds. Most people practice a set it and forget approach to their 401k. Factor your unvested portion when deciding to leave your job. In this case, all of your retirement funds could be yours, only if you stick around long enough.
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