Arielle earns $⁢75,000 annually. Her company offers a 401(k) plan with a 75% match on her contributions up to 6% of her salary. The vesting schedule is cliff vesting over 4 years. If Arielle contributes 6% of her salary, how much will the employer contribute annually, and how much will be vested after 2 years?

Arielle contributes 6% of $75,000, or $4,500. The employer matches 75% of that amount, so its annual contribution is $4,500 × 0.75 = $3,375. With four-year cliff vesting, none of the employer’s contributions are vested until she completes four years, so after two years she has $0 vested. The correct choice is “$3,375 employer contribution, $0 vested after 2 years.”

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