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401k Forfeiture: Overview, How It Works, Example

By Lyle DalyUpdated May 29, 2025 at 6:42 PM | Fact-checked by Frank Bass

Key Points

  • 401(k) forfeiture occurs if you leave a job before being fully vested.
  • Employer contributions vest according to schedules, with many employers using cliff vesting or graded vesting.
  • To avoid losing employer contributions, stay with the company until fully vested.

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