◈ GLOSSARY · RETIREMENT
Vesting.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
The schedule on which employer-contributed money — 401(k) match, RSUs, profit-sharing — actually becomes yours to keep if you leave. Cliff vesting means you get 0% then 100% on a single date; graded vesting means you accrue ownership over years (e.g., 20% per year for five years). Your own contributions are always 100% yours immediately.
◈ IN PRACTICE
Example
An employer matches $5,000/year with a 4-year graded schedule (25%/year). After two years you're 50% vested — leave now and you keep $5,000 of the $10,000 they contributed; stay four years and you keep all of it.