Say you have a retirement plan where you contribute part of your salary every month, and your employer also matches. Say that the program vests incrementally every year.

So when someone says that for example, 60% of their retirement plan has vested….what amount does this refer to exactly? Does this mean that upon retirement, the employee is entitled to ALL his personal contributions + 60% of the employer matching? Or is the employee only entitled to 60% of both his personal contributions and the employer matching amount?

Can someone please clarify? Thanks!!

It’s 60% of the company’s matching funds. Any money you put in is immediately yours. However, that obviously doesn’t mean there are no penalties, etc. if you try to withdraw the money early. The same rules apply to both yours and the company’s contributions.