Thinking of Leaving Your Job in 2027? Here's How It Could Cost You Your 401(k) Match.

Leaving your old job behind for a new one could bring a higher salary, more enjoyable work, and possibly a better quality of life. But it also brings a unique set of challenges. You'll have to learn a new position, navigate changes to your routine, and deal with your old 401(k).

It's possible that switching jobs could cost you some of the 401(k) match in your current plan. But this isn't the case for everyone, and it doesn't always mean the job change is the wrong move for you.

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Why leaving your job could cost you your 401(k) match

Most 401(k) plans have a vesting schedule, which determines when you're allowed to keep your employer-matched funds after leaving the company. There are two common types: cliff vesting schedules and graded vesting schedules.

Cliff vesting schedules may last up to three years. If you leave before you've worked there long enough, you forfeit all of your employer-matched funds, though you still get to keep your personal contributions.

Graded vesting schedules can last up to six years. These gradually release your employer match to you. For example, you might be eligible to keep 20% of your match if you leave the company after one year, 40% after two years, and so on.

If you've been with your employer for at least six years, you should be in the clear. And obviously, if your company doesn't offer a 401(k) match or you've never claimed it, this shouldn't be an issue for you. But if you have received a 401(k) contribution from your employer and you're not fully vested, you'll have a decision to make.

What to weigh before switching jobs

If you only have a few months until you're fully vested, it might be worth sticking it out a bit longer before you quit your job, especially if you have a cliff vesting schedule. Check with your employer if you're not sure how your company's vesting schedule works.

When you're not even close to being fully vested, you have to consider the amount you'll lose by leaving the company versus the amount you'll gain by switching to a new employer. If the new job comes with a significant raise, you might be willing to forgo a small loss in your current 401(k).

When you change jobs, understand how this move will affect your old 401(k) and update your retirement plan to determine how much you must set aside to reach your goals. And if you aren't eligible to contribute to your new 401(k) immediately, have a backup plan for where you'll store your savings in the meantime.

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