Vesting: What Does It Mean?

Vesting is the process of earning full ownership rights to employer-provided benefits over time. While you might see employer 401(k) contributions or stock options in your account immediately, you don't fully own them until they've vested according to your company's schedule.

Companies use vesting schedules to encourage employee retention. Understanding your vesting schedule matters for career decisions. If you're considering leaving a job and you're close to a vesting milestone, the financial difference could be significant.