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What Are 401(k) Forfeiture Accounts?

If you receive employer contributions to your 401(k), it's possible the money could end up in a 401(k) forfeiture account if it's not vested.

By Motley Fool Retirement Team – Updated Nov 27, 2024 at 12:55AM

Key Points

  • Employer contributions to a 401(k) may not fully vest immediately, risking forfeiture if you leave early.
  • Forfeited 401(k) funds go into forfeiture accounts, used for plan expenses or future contributions.
  • Understanding your plan's vesting schedule can prevent unexpected losses of employer contributions.
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