Retirement 101

What does vesting mean?

Vesting is a schedule that spells out when you’re entitled to your pension. Being vested, however, doesn’t mean you’ll be able to take money out of your plan any time you want. It only means you have a right to your pension at retirement age. Under federal law, there are two types of vesting. With cliff vesting, once you reach a certain amount of years worked (not more than 5), you’re 100% vested. With graduated vesting, you earn an increasing portion of your pension as the years pass (not more than 7).