Your own 401(k) deferrals are always yours. The employer match is different: many plans use a vesting schedule that says how much of the match you keep if you quit, get laid off, or change jobs. Leaving a month before a cliff can forfeit years of “free money.”
Match formulas and why capturing them matters: Employer match on 401(k). How match fits beside a Roth IRA: Roth IRA vs 401(k) starter.
Cliff vs graded vs immediate
| Schedule | How it usually works | Leave-risk pattern |
|---|---|---|
| Immediate | Match is 100% yours as it posts | Low forfeiture risk |
| Cliff | 0% vested until a date (often 2–3 years), then 100% | Huge jump the day you cross the cliff |
| Graded | e.g. 20% per year over 5 years | Partial keep each year; full keep at the end |
Safe-harbor matches are often immediately vested; discretionary matches may not be. Plan documents and the summary plan description (SPD) control—not a recruiter’s verbal summary.
Confirm the employer contribution line on your pay stub and the vested balance in the Fidelity, Vanguard, Empower, or Alight portal your employer uses.
What you keep vs what you forfeit
- Always yours: elective deferrals, most rollover-in balances, and earnings on those dollars (plan rules still apply to loans and withdrawals).
- Subject to vesting: employer match, and often non-elective profit-sharing.
- Forfeited if unvested when you leave: that unvested slice typically returns to the plan; you do not cash it out.
A layoff and a resignation usually use the same vesting clock. Severance packages sometimes negotiate accelerated vesting—ask in writing; do not assume.
Worked example
Priya’s plan matches 100% of the first 4% deferred. Vesting is a three-year cliff. After 2 years and 10 months she has about $9,600 of employer match plus earnings in the match source. She accepts a new job and starts in six weeks—two months before the cliff.
If she leaves now, the unvested $9,600 is forfeited. If the start date can slip eight weeks, or she negotiates a delayed resignation, she may keep the full vested match. Her own deferrals (~$14,000) stay hers either way and can roll to an IRA or new plan after separation.
Job-change checklist before you resign
- Download the SPD vesting page or screenshot the portal vesting %.
- Ask HR: “As of my proposed last day, what percent of the match source is vested?”
- Check whether unpaid match for the current quarter posts after your last day.
- Avoid a large 401(k) loan right before exit if repayment accelerates on separation.
- Map cash runway if the move is involuntary: Sudden job loss.
Common misconceptions
- “The match is free, so vesting does not matter.” Free only means the employer paid it—not that it is portable on day one.
- “I am 100% vested in my account balance.” Portals often show a blended balance; open the vested column by source.
- “Switching to Roth deferrals changes vesting.” Match vesting is usually independent of whether your deferral is Roth or traditional.
After you confirm what is vested, use a direct rollover checklist when the money leaves the plan: 401(k) to IRA rollover checklist.
Checklist
- Find cliff vs graded vs immediate language in the SPD.
- Note the exact years of service definition (hire date vs plan-entry date).
- Before any resignation, ask HR for vested % as of your last day.
- Time voluntary exits after cliffs when the dollars are material.
- Keep deferrals high enough to capture match while you stay.
- After exit, roll vested balances deliberately; do not cash out casually.
Educational only. Not tax, legal, or investment advice. Vesting schedules and IRS rules vary by plan; confirm with plan documents and HR.