The 401(k) Vesting Trap: Why Travel Nurses Leave Thousands on the Table

Here’s a scenario that plays out constantly in travel nursing: You work with an agency for 10 months, contributing 6% of your salary to their 401(k) with a 3% employer match. Then a better contract comes along with a different agency, so you switch.

What happens to that employer match? If the agency uses a 2-year cliff vesting schedule (many do), you just forfeited 100% of it. Ten months of contributions from your employer—gone.

This is the 401(k) vesting trap, and it quietly costs travel nurses thousands of dollars every year.

Understanding Vesting Schedules

“Vesting” is the process by which you earn ownership of your employer’s 401(k) contributions. Your own contributions are always 100% yours. But employer match is different.

Common Vesting Schedules

Immediate Vesting (Best for Travelers)

• 100% vested from day one
• Rare but some agencies offer this
• Ask specifically when comparing agencies

Cliff Vesting (Most Common in Travel Nursing)

• 0% vested until you hit the cliff (usually 2-3 years)
• Then 100% vested all at once
• Leave at 23 months? You get 0%

Graded Vesting

• Gradual vesting over time
• Example: 20% per year for 5 years
• Better than cliff, but still punishes short tenure

The Real Dollar Impact

Let’s see how this plays out for a typical travel nurse.

Scenario: 18 Months Across Two Agencies

Agency A: 8 months

• Monthly salary: $8,000
• Your contribution: 6% ($480/month)
• Employer match: 3% ($240/month)
• Total employer contributions: $1,920
• Vesting schedule: 2-year cliff
• Amount vested: $0
• Amount forfeited: $1,920

Agency B: 10 months

• Monthly salary: $8,500
• Your contribution: 6% ($510/month)
• Employer match: 4% ($340/month)
• Total employer contributions: $3,400
• Vesting schedule: 2-year cliff
• Amount vested: $0
• Amount forfeited: $3,400

Total Forfeited: $5,320

Now imagine this pattern repeating over a 10-year travel nursing career. You could easily forfeit $25,000-40,000 in employer contributions.

The Single-Agency Alternative

What if you stayed with one agency for those same 18 months?

• Same total income
• Same contribution rate
• Same employer match
• But: After 18 months, you’re closer to vesting
• After 24 months, you’d own 100% of ~$6,500 in employer contributions

Why This Happens

Travel nurses switch agencies for legitimate reasons:

• Better contracts elsewhere
• Poor recruiter relationship
• Agency limitations by geography or specialty
• Following specific facilities

The problem isn’t switching agencies—it’s not accounting for vesting in your decisions.

How to Avoid the Vesting Trap

1. Know Your Vesting Schedule Before You Start

When evaluating a new agency, ask specifically:

• “What is your 401(k) vesting schedule?”
• “Is it cliff or graded?”
• “Are there any conditions that accelerate vesting?”

Add this to your agency comparison alongside pay rates and benefits.

2. Factor Vesting into Agency Switches

Before leaving an agency, calculate:

• How much employer match you’ll forfeit
• How close you are to vesting
• Whether the new opportunity offsets the loss

Example Decision Matrix:

3. Prioritize Agencies with Immediate Vesting

When all else is roughly equal, choose agencies offering immediate vesting. The pay difference might be $1-2/hour less, but you keep 100% of employer contributions.

Some agencies advertising “401(k) with match” have immediate vesting—you just have to ask.

4. Consider the “Home Agency” Strategy

Some experienced travelers maintain a relationship with one “home agency” for:

• Benefits continuity
• 401(k) vesting accumulation
• Backup contracts when needed

They may take contracts from other agencies, but keep the home agency relationship active enough to retain vesting progress.

5. Maximize Your Own Contributions

Since your contributions are always 100% vested, consider:

• Contributing the maximum ($23,000 in 2026)
• Using a Roth 401(k) option if available
• Rolling over when you leave to an IRA you control

Agency 401(k) Comparison

Based on 2026 data from major travel nursing agencies:

Note: Vesting schedules change. Always confirm current terms before starting.

What Happens to Forfeited Money?

When you leave before vesting, employer contributions go back to the company’s 401(k) plan. Depending on plan rules, the money may:

• Reduce future employer contributions
• Cover plan administrative costs
• Be redistributed to remaining participants

Either way, you don’t get it.

Rolling Over Your 401(k)

When you leave an agency, you have options for your vested balance:

1. Leave it in the plan (if allowed)

   • Simple but creates account sprawl
   • May have higher fees than alternatives

2. Roll to new employer’s 401(k)

   • Consolidates accounts
   • Limited to new plan’s investment options

3. Roll to an IRA

   • Most flexibility and control
   • Can choose low-cost providers (Vanguard, Fidelity, Schwab)
   • Recommended for most travelers

4. Cash out (Not recommended)

   • 10% early withdrawal penalty if under 59½
   • Plus income taxes
   • Destroys retirement savings

Building Retirement Wealth as a Traveler

Despite the vesting challenge, travel nurses can still build substantial retirement savings:

Strategy 1: Maximize Your Contributions

Your contributions are always yours. Max out the $23,000 annual limit before worrying about employer match.

Strategy 2: Use an IRA

Contribute to a Roth IRA ($7,000 limit in 2026) in addition to 401(k). This is completely under your control.

Strategy 3: HSA as Stealth Retirement Account

If you have a high-deductible health plan:

• Contribute to HSA ($4,300 individual limit)
• Triple tax advantage
• Can be used for retirement after 65

Strategy 4: Taxable Brokerage

After maxing tax-advantaged accounts, invest in a taxable brokerage. More flexibility, no contribution limits.

Calculate Your Vesting Exposure

Use our 401(k) Vesting Comparison Tool to see:

• How much employer match you’ve accumulated
• What you’d forfeit by leaving
• Comparison of staying vs. switching

Enter your agencies, months worked, and salary to get a personalized analysis.

The Bottom Line

The 401(k) vesting trap is a real but solvable problem. You don’t have to stop switching agencies—just be intentional about it.

Key Takeaways:

• Always ask about vesting schedules before starting with an agency
• Factor unvested employer match into agency-switching decisions
• Prioritize agencies with immediate vesting when possible
• Maximize your own contributions (always 100% yours)
• Roll over to an IRA when you leave for maximum control
• Don’t let the vesting trap stop you from travel nursing—just account for it in your financial planning