Question

question 3 of 6
what does it mean when the money in your 401(k) is vested?
select a response.
you can keep the money your employer contributed, even if you leave your job.
you will not have investment gains in your employer - sponsored retirement plan.
you will never have to pay taxes on your employer - sponsored retirement plan.
you can withdraw your money at any time without a penalty fee from the irs.

Explanation:

To determine the correct answer, we analyze each option:

• Option 1: Vesting in a 401(k) means the employee gains full ownership of employer - contributed funds, even if they leave the job. This matches the definition of vesting.
• Option 2: Vesting has nothing to do with investment gains; investment gains depend on the performance of the investments in the 401(k), so this is incorrect.
• Option 3: Taxes on 401(k) funds are still applicable in many cases (e.g., when withdrawing in retirement under certain conditions or for non - qualified withdrawals), so the claim of never paying taxes is wrong.
• Option 4: 401(k) withdrawals before a certain age (usually 59.5) generally have IRS penalties, and vesting doesn't remove this penalty. So this is incorrect.

Answer:

A. You can keep the money your employer contributed, even if you leave your job.