What this calculator does
It splits your employer match into the part you already own and the part you would forfeit by leaving today, then shows what the same balance is worth if the plan terminates instead.
Articles about redundancy and retirement plans are written for employers, so the rule that hands unvested money to the employee tends to appear in law firm briefings and nowhere a laid-off person would think to look.
What each input means
- Employer match in your account. Only the employer contributions and their growth. Your own contributions are always fully yours and are deliberately excluded, because a vesting schedule never applies to them.
- Years of service. As your plan counts them, which is usually from your hire date. Graded schedules step at whole years, so eleven months into your third year still shows the second year’s percentage, matching what a statement will say.
- Vesting schedule. Graded hands the money over in steps, cliff hands it over all at once, immediate means it was never at risk.
- Years to fully vested. From your Summary Plan Description. The calculator will not model anything slower than the law permits.
Worked example
A $20,000 employer match balance, three years of service, on a 6-year graded schedule:
- Vested: 40%, or $8,000.
- Forfeited by leaving today: $12,000.
- Years until all of it is yours: three.
- If the plan terminates: the full $20,000, because termination vests affected participants at 100% whatever the schedule says.
That last line is the same figure at every length of service. Vesting schedules decide what you keep when you leave an ongoing plan. They do not decide what you keep when the plan itself ends.
The legal maximums
A plan cannot vest employer contributions more slowly than a 3-year cliff or a 6-year graded schedule. Enter something slower and the calculator returns 100%, because a schedule that slow is not permitted rather than merely unusual. Plenty of plans are faster, and immediate vesting is common in safe harbor plans.
Frequently asked questions
What does vested mean in a 401(k)?
Vested means the money is yours to keep whatever happens next. Your own contributions are always 100% vested from the day they go in. Vesting schedules apply only to employer contributions, which is why this calculator asks for the match balance rather than your total.
How long does 401(k) vesting take?
Whatever your plan document says, up to a legal maximum. Since the Pension Protection Act a plan cannot vest employer contributions more slowly than a 3-year cliff or a 6-year graded schedule. Many plans are faster, and some vest immediately.
What is the difference between cliff and graded vesting?
Cliff vesting is all or nothing: you own none of the employer money until you hit the cliff, then all of it at once. Graded vesting hands it over in steps, typically 20% a year from year two on a 6-year schedule. Cliff is worse if you leave early and better if you stay just past the cliff.
Do I lose my employer match if I quit?
You lose whatever is not yet vested. Your own contributions and their growth are never at risk. This is worth calculating before handing in notice, because leaving a few weeks before a vesting anniversary can cost a meaningful sum for no reason.
What happens to vesting if my company is bought or shuts down?
If the plan terminates, every affected participant becomes 100% vested in employer contributions regardless of the schedule. The same applies to a partial termination, which the IRS presumes when turnover reaches 20% or more in a plan year through employer action. That is what the second panel calculates.
Does a partial termination need me to claim it?
No. It is an obligation on the plan rather than a favour you apply for. The reason to know about it is that plans get it wrong, particularly when the employer is distracted by the same redundancy round that triggered it.
Where do I find my own vesting schedule?
The Summary Plan Description, which your employer must provide and which governs. Your plan portal usually shows a vested balance as well as a total balance, and the gap between the two is what this calculator is about.
Read more
The full explanation of what happens to a 401(k) when an employer fails or is bought, including partial termination and the 20% turnover threshold, is in what happens to your 401(k) if your company goes bankrupt or is acquired. For vesting in a defined benefit pension, which follows different rules, pension vesting. If you have already left, transferring a 401(k) from a previous employer covers the options.
A planning estimate, not legal or tax advice. Your plan’s Summary Plan Description governs, and it can be more generous than the legal minimum.