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The Truth About Personal Finance (Collection) by Kay S. Bell, Steve Weisman

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Truth 28. Vesting rules for 401(k)s

Now that we have determined that it is beneficial to participate in a 401(k) plan at work, are there any limitations on your ability to participate in the plan? Your employer does have some leeway about how it handles 401(k) plans.

One of the most important rules regarding participation in your company’s 401(k) plan is the threshold question of when you’ll be eligible to invest in one. Not all plans permit you to participate in your company’s plan immediately. The law permits the employer to defer your eligibility for as long as a year from the time that you join the company. In addition, not all employers make matching contributions to your individual 401(k) plan, although most do. Even those ...

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