IRA Investments - 401k Vested Investments
There are a number of things to consider when planning for your retirement. Of course one of the more important factors is, the sooner you begin, the better off you will be when you get to retirement age. If you have been working for a company with an IRA Investments or 401k plan and are enrolled in their retirement plan you have already accumulated some savings. What happens to the money that you have put away if you are suddenly laid off? Luckily you will not loose you plan, it will remain intact even if you are laid off.
The first thing you need to do is find out if you are vested. The contributions you have made to your IRA Investments or 401k are always yours, even if you are laid off or your company goes bankrupt. Your employer contributions may be a different situation, as they must be vested before they can be permanently yours. Many IRA Investments or 401k plans are immediately vested for a matching contribution, which means that the money your employer has matched, belongs to you as soon as it has been deposited. Some plans will only allow you to keep your employer's contribution after you have been with them for a period of two or three years. Other companies may stipulate a vesting schedule that is graduated allowing you to gradually increase the percentage of your employer's contributions and is often based on job tenure.
When looking at your company's retirement IRA Investments or 401k plans it is important that you understand exactly what vesting means.
The vested portion of your plan is what immediately belongs to you and cannot be taken away or kept from you. In most company plans there are two types of contributions; one is the contribution you make and the other is the matching contribution your employer makes. The portion you contribute is always 100% vested, meaning it is yours no matter what happens to your job or the company you work for.
The matching contribution that your employer makes is often subject to some type of vesting requirement. In these cases your employer requires you to earn the company's contribution over a period of time. If for example you have only been with the company for a few years, which may be 25% vested under the rules of your plan's vesting schedule then you would only have a right to $25.00 of each $100.00 that your employer contributes.
Clearly there is much to consider when deciding on an IRA Investments or 401k-retirement plan and your decision could have tremendous effects on your financial stability when it comes time for retirement. It is vital that you do research on which plan is best for your particular situation. It takes very little time to fire up your laptop to find all the information you need to make the choices.