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:

Vesting in a 401(k) refers to the process by which an employee gains full ownership of employer - contributed funds over time. Once vested, an employee can keep the employer - contributed money even if they leave the job.

• Option 2: Investment gains are part of the normal operation of a 401(k) and are not related to vesting.
• Option 3: Taxes on 401(k) contributions (either traditional or Roth) are determined by the type of 401(k) and not by vesting.
• Option 4: Withdrawal rules (including penalties) are set by IRS regulations regarding retirement accounts and are not related to vesting.

Answer:

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