Sunny works for a company that offers a 401(k) with a 50% match on employee contributions up to 5% of their salary. Sunny has a salary of $⁢65,000 The company has a 3 -year cliff vesting schedule. If Sunny contributes 5% of their salary, how much will the employer contribute annually, and how much will be vested after 2 years?

Sunny contributes 5% of $65,000, or $3,250. The employer matches 50% of that amount, so it contributes $1,625 annually. With a 3-year cliff vesting schedule, none of the employer contributions are vested before Sunny completes 3 years, so $0 is vested after 2 years. The correct choice is “$1,625 employer contribution, $0 vested after 2 years.”

AI-written and checked against the verified answer.