A 401k question.
 

I will receive 401k benefits soon, with my company matching 100% of my input to 1% of my total yearly income. However, I was told that I had to stay with the company for 6 years.

Does that mean that, if in 5 years with the company I contribute $1000 to my 401k, but then quit, that they just throw that money away? What happens to my money if I don't stay for 6 years?

I have never worked anywhere before that offered me a benefits package, so though this may be a basic question to others, I know nothing about this other than when I retire, they will hopefully give me all of my money back.

you get *your* contribution at 100% when ever you leave, it has to be rolled over into an IRA or some other retirement qualifying product. You can cash it in but at a very stiff high penalty.

the companies contribution at 1% of your annual salary will be given to you at 100% when you are fully vested as an employee. So since you say it takes 6 years to be vested, then each year of service you get a percentage of their match 16.666% for each year of service.

good luck!

Well, that percentage may not necessarily be correct, I would check with your HR benefits person to be sure. Depending on the company, they may have different types of vesting, for all we know, you may not be vested at all until you hit that 6 year mark (cliff vesting), or you may be eligilbe for the 401(k) after 1 year of employment and it vests at 20% each year (hence the 6 years total)

However, like cynthetiq said, you will always get the portion of funds you put in back, regardless of when you leave.

As a result of the Economic Growth Tax Relief and Reconcilliation Act (EGTRRA), cliff vesting cannot exceed 3 years and graded vesting cannot exceed 6 years.

So good news....by year 3, they owe you at least something.

All that aside -- company match or not -- a 401(k) is a fantastic way to save for retirement. Put in as much as you can.

A decent website for more information is www.401khelpcenter.com

Good luck!

And to answer your other question -

The nonvested portion of the company contributions to your plan get essentially "thrown into" the total company pot, thus reducing the amount of contributions the company needs to make next time for the remaining employees.

They're called forfeitures.

Still, that 401K sucks.

We get 5%(of earnings) company matching, and we're fully vested in 3 years.

There are many companies that are not matching at all, so I would not say that any free money sucks.