If you have a workplace benefits package, some of your perks may come with a "vesting schedule" or "vesting period." It's critical to understand how vesting works and consider it before deciding to leave your job.
This post will explain different types of vesting and answer frequently asked questions, so you get the most from your benefits at work.
What does it mean to be vested with a company?
Vesting is a legal term that means you have the right to something, such as a payment or benefit. It's typically used in retirement plan language to set a timeline for when a participating employee earns the right to keep employer matching, profit-sharing contributions, or other benefits.
Vesting is an employee retention tool that companies use to keep top talent from leaving. It can be helpful in industries where worker turnover is high or skills are in high demand. By offering you a financial incentive to stay employed longer, you may be less likely to job hop.
Leaving a company before you've worked long enough to be vested comes with negative consequences, such as forfeiting employer-provided stock incentives or contributions to your retirement plan.
So, being vested means you officially get to keep certain employee benefits if you leave your job. Leaving a company before you've worked long enough to be vested comes with negative consequences, such as forfeiting employer-provided stock incentives or contributions to your retirement plan.
How long a vesting period lasts varies from company to company. However, a typical vesting schedule is from three to five years. Being fully vested means that you get to keep 100% of the benefits, and being partially vesting means you get a percentage of them based on a predetermined schedule.
Note that you're always 100% vested in your contributions to a retirement plan, no matter when you leave a company. According to federal law, the Employee...
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