I recently opened a 401K account ?

Question

with my employer. My employer matches my contribution. Does that mean the amount that I have accumilated is mine including the employer match? Thanks.

Answer 1

Maybe.  Depends on how long you have to be there to vest.  First check with you plan administrator to see what type of vesting arrangement there is and how long it takes to vest.  vesting just means that you have reached a point where all the money in the account is yours.  Prior to reaching your vesting period, only the money you deposit is fully yours.

There are basically two types of vesting schedules - gradual and cliff.  In a cliff vesting schedule, the entire employer contribution becomes yours all at once - say in 5 years.  Thus, for the first 5 years, you are entitled only to your deposits plus capital gains and on the day after 5 years, you become entitled to your deposits, your employer's deposits and the capital gains on all the money.

under a gradual vesting schedule, you become entitled to an increasing percentage each period - usually over 5 years.  So after the first year, you are vested in all your contributions, plus 20% of the employer's contributions; after the second year all yours and 40% of the employer's contributions, etc.

Some plans have no vesting schedule which means you are vested immediately (or after a short waiting period - say 90 days).  In any event, all the money you contribute, plus the resulting capital gains on your money is always yours with no vesting period.

Answer 2

OFF COURCE ,YES