Vesting_and_Your_401_k_

Document Sample
Vesting_and_Your_401_k_ Powered By Docstoc
					Title:
Vesting and Your 401(k)

Word Count:
277

Summary:
Do you have a 401(k) retirement account? Are you vested yet? Before you
move on to your next job, it is critical for you to find out if you are
fully vested in your retirement account before you make the move. If you
are not, you could lose hundreds if not thousands of dollars in employer
contributions.


Keywords:
401(k), 403(b), retirement savings plans, rollover savings, personal
investing, savings, pensions


Article Body:
Do you have a 401(k) retirement account? Are you vested yet? Before you
move on to your next job, it is critical for you to find out if you are
fully vested in your retirement account before you make the move. If you
are not, you could lose hundreds if not thousands of dollars in employer
contributions.

Vesting refers simply to the non-forfeitable percentage of your account’s
assets. In other words, whatever you contribute to your 401(k) plan is
always yours to keep including any rollover money.

If your employer contributes to your plan, a vesting schedule for the
employer’s contribution is part of the plan. This schedule ties in a non-
forfeitable percentage to the employer’s contribution for each year of
service until you are fully vested – 100% – in the employer contribution.

Vesting schedules vary with the employer. A sample schedule could include
you being fully vested after three years of service. After year one the
schedule may have you one third vested; after year two you could be two
thirds invested; finally upon your third anniversary you would have full
entitlement to your employer’s contributions, thus you would be 100%
vested.

In all cases, upon leaving a company your contribution and any rollover
funds are yours to keep. However, depending on your employer’s vesting
schedule only a percentage of the funds contributed by your employer may
actually be yours to keep. If you leave before you are fully vested, you
stand to lose a significant amount of money. Thus, it behooves you to
calculate whether the financial benefits of the new job outweigh any
potential loss of employer contributions to your 401(k) account.

				
DOCUMENT INFO