What does vested in a 401k plan mean?

The vested portion of a 401k account is the portion which is yours and which cannot be forfeited in the event that you sever employment with the organization. The money which you contribute into the plan is immediately vested, but any portion which your employer contributes on your behalf may be subject to a vesting schedule. In other words, portions of that employer contribution would become yours over time.  For example, a 5 year vesting schedule would mean that a person receiving a $10,000 contribution from their employer would have $2,000 per year of that contribution vest over the course of 5 years.  Vesting requirements are common for employer contributions into an employee’s 401k plan.