In the context of a retirement plan, 'vest' refers to the process by which an employee becomes entitled to the employer's contributions or benefits. When an employee is said to be 'vested' in a retirement plan, it means they have earned the right to receive the employer's contributions or benefits, even if they leave the company before retirement. Vesting is a way for employers to incentivize employees to stay with the company for a certain period of time, as it ensures that they will receive the benefits they have earned. The specific rules and timelines for vesting vary depending on the retirement plan and the employer's policies. Some retirement plans have immediate vesting, meaning employees are fully entitled to the employer's contributions from day one. Others have a graded vesting schedule, where employees become increasingly vested over time. For example, a retirement plan might have a 5-year graded vesting schedule, where employees become 20% vested after 1 year, 40% vested after 2 years, and so on, until they are fully vested after 5 years. It's important for individuals to understand the vesting rules of their retirement plan to make informed decisions about their future financial security.