Educational information, not individual financial advice.
Key Takeaways
If your employer offers a 401(k) match, capturing it in full is usually the highest-return move in personal finance. There is no investment that reliably beats an instant, guaranteed return on your money.
The employer adds money based on what you defer. Common formulas:
The universal advice: defer at least up to the match threshold. On a "100% of first 3% + 50% of next 2%" plan, that means deferring 5% to collect the full 4% — an 80% instant return on the matched dollars. Stopping short leaves guaranteed money on the table.
Your own contributions are always 100% vested immediately — they're yours no matter what. Vesting applies only to the employer's contributions:
So leaving a job early can forfeit part of the match. On a 6-year graded schedule, walking away after 2 years might mean keeping only 20% of the employer money — while every dollar you contributed stays yours.
If you front-load your contributions and hit the annual limit early in the year, per-paycheck matching can stop before you've earned the full annual match. Some plans run a year-end "true-up" that makes up the difference; others don't. If yours doesn't, spreading contributions across the whole year protects your match.
Horizons accounts for your employer match in your contribution modeling, so your forecast reflects the real money going in — not just your own deferrals.
Your employer matches 100% of the first 3% and 50% of the next 2% you contribute, on a 6-year graded vesting schedule. What should you do, and what happens if you leave after 2 years?
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