Your own 401(k) contributions are always yours, but employer match money can take years to vest, and leaving weeks before a vesting date can forfeit thousands. Before you give notice or accept an offer, look up that date, then negotiate a start date after it or a signing bonus that covers the loss.
Say your employer deposits $2,400 a year in matching money, and your plan vests all of it at once after three years of service. Resign three weeks before you reach that mark and you leave without the roughly $7,000 it has put in, plus whatever that money earned. Stay three more weeks and all of it is yours.
Federal law caps the wait for a 401(k) match at three years when it vests all at once, called cliff vesting, and six years when it vests in yearly steps, called graded vesting. Your plan sets those dates. The start date at your next job is yours to negotiate.
Your plan’s website and account statements show your vested balance, and the summary plan description lays out the schedule and how the plan counts a year of service. That’s generally 1,000 hours worked in a 12-month period, which may not start on your hire date, so don’t assume your next vesting date falls on your work anniversary.
If that date falls a few weeks after your planned exit, ask the new employer for a start date past it. If they can’t wait, ask for a signing bonus that covers the gap between your total and vested balances. Give notice only after the date passes, since an at-will employer can accept a resignation effective immediately.
Check three more things in the same pass. Some plans pay the year’s match or profit-sharing contribution only to people still employed on the plan year’s last day. Read your bonus plan for a rule that you must be on the payroll the day it pays. And federal law doesn’t require payment for unused vacation, so ask whether yours is paid out, and take the days before you go if it isn’t.
If asking for a later start feels awkward, price the wait by the week. Divide what you’d forfeit by the weeks left until the vesting date. At $7,000 over three weeks, waiting pays more than $2,000 a week.
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