Vesting
The schedule on which employer contributions or equity grants actually become yours to keep if you leave.
What Vesting means
Vesting determines when money your employer has put in your name is genuinely yours. Your own 401(k) contributions are always fully vested; the employer match frequently is not.
Cliff vesting grants everything at once after a set period — nothing at two years and eleven months, 100% at three years. Graded vesting phases in, often 20% a year over five years.
Equity compensation follows the same logic. A standard startup grant vests over four years with a one-year cliff, meaning you receive nothing if you leave in the first year and then vest monthly thereafter.
The practical consequence is that a resignation date can be worth real money. Checking your vesting schedule before giving notice is a small piece of diligence that occasionally pays for itself many times over.
Related terms
401(k)
An employer-sponsored retirement account that lets you invest part of your paycheck before taxes, often with a matching contribution.
Roth IRA
A retirement account funded with after-tax dollars where qualified withdrawals, including all growth, come out tax-free.
Net Worth
Everything you own minus everything you owe — the single clearest measure of your overall financial position.
Capital Gains
The profit from selling an asset for more than you paid, taxed at a lower rate if you held it longer than a year.
Run the numbers
Retirement Calculator (401k & Roth IRA)
Project your retirement balance with employer match and compound growth, and compare Traditional vs. Roth after-tax outcomes.
Free newsletter
Get smarter about money — every week
Join thousands of readers who receive our carefully curated analysis on personal finance, investing, and economic trends.
No spam. Unsubscribe anytime. We never sell your data.