It’s still free money, though, which is a price that’s too good to pass up. Check with your human resources department for your plan’s employer-contribution details.
2. Stick around until you’re fully vested
Just because an employer has contributed some of its own cash into your 401(k) doesn’t necessarily mean it’s yours to walk away with whenever you want. Many companies also require you to work a fixed number of years before you can keep those funds.
It’s called vesting. Like an organization’s approach toward determining how much of its own money it puts into your retirement account, vesting plans can differ from one employer to another. For example, some workers are only 20% vested after their second year of employment and 60% vested after their fourth year. After six years, 100% of employer contributions to their 401(k) are vested, even if they resign.
Granted, sometimes a job is so unbearable that no amount of money makes it worth sticking around. If there’s a fair amount of not-yet-vested money on the table, though — and the job isn’t so bad — leaving is something to think twice about.
3. Set yourself up for good, reliable returns
All too often, we as investors can become so hyper-focused on the technicalities of a 401(k) that we forget it’s first and foremost an investment vehicle meant to build a healthy retirement fund. As such, we don’t pay a great deal of attention to the funds owned within the account. Worse, we can accumulate (though less and less often these days) a bunch of stock issued to us by our publicly-traded employers as compensation in our 401(k) accounts.