How much of my 401(k) is actually mine if I leave my job?

By Kaz · Published 28 September 2026 · How this site checks figures

Summary

Every dollar you deferred from your own paycheck is yours no matter when you leave. The employer's match is yours only to the extent it has vested under your plan's schedule. In the two schedules the IRS uses as examples, the match is either 0% vested until three years of service and then 100%, or 20% vested at two years and another 20% each year until 100% at six. The vested part is what you can take to a new plan or an IRA, and the unvested part can be forfeited.

Two kinds of money in one balance

Your statement mixes two kinds of money. Elective deferrals, the part of your pay you chose to put in, "are always 100% vested, or owned, by the employee," according to the IRS, and an employer cannot forfeit vested money for any reason.

The employer's contributions follow the plan's vesting schedule instead. A plan may match deferrals if its document allows it; the IRS illustrates this with an employer that puts in 50 cents for each dollar an employee defers.

The two schedules the IRS uses as examples

Plans choose their own vesting schedule, anywhere from immediate vesting to a gradual one. The IRS page illustrates two:

Cliff vesting: 0% for the first two years of service, then 100% at three.
Graded vesting: 20% after two years, 40% after three, 60% after four, 80% after five, and 100% after six.

A year of service is defined by the plan, but the IRS says it is generally 1,000 hours worked over 12 months.

As an example, take $12,000 of employer match in the account. Leave after four years and the graded schedule lets you keep 60%, or $7,200, while the cliff schedule lets you keep all $12,000. Leave after two years and the order reverses: the graded schedule lets you keep 20%, or $2,400, and the cliff schedule gives you nothing from the match.

The IRS names three places to find your own plan's schedule: the Summary Plan Description, your annual benefits statement, and your employer or its human resources department.

When the unvested part is lost

According to the IRS, unvested amounts may be forfeited when you are paid your account balance, for example after you leave, or when you work no more than 500 hours a year for five years. Once you cash out or roll over the vested balance, the unvested match stays behind.

Plans where the match vests at once

Some plans have no waiting period for the match. A safe harbor 401(k) must make employer contributions that are "fully vested when made," and a SIMPLE 401(k) has the same requirement. In any plan, everyone becomes 100% vested on reaching the plan's normal retirement age or when the plan is terminated.

Leaving the job is also what lets the plan pay out the vested balance, because a severance from employment is one of the events that allows a 401(k) to distribute elective deferrals. How that balance then moves to another plan or an IRA is covered in the guide to what a rollover does.

Sources

Written by Kaz, an independent publisher.
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