Employer Match & Vesting

How matches work

The employer adds money based on what you defer. Common formulas:

• Basic safe-harbor: 100% of the first 3% you defer + 50% of the next 2% → up to 4% of pay.
• Enhanced: e.g. 100% of the first 4–6%.
• "50% up to 6%": the employer adds half of what you put in, up to 6% → max 3%.

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.

Vesting: what you actually keep

Your own contributions are always 100% vested immediately — they're yours no matter what. Vesting applies only to the employer's contributions:

• Cliff vesting: you keep 0% until a threshold, then 100% all at once (federal law caps this at a 3-year cliff).
• Graded vesting: you keep an increasing share each year (a common schedule: 20% after year 2, rising to 100% by year 6 — the legal maximum).

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.

One trap: the true-up

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.

How Horizons uses this

Horizons accounts for your employer match in your contribution modeling, so your forecast reflects the real money going in — not just your own deferrals.

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