What happens when you become vested in your 401k?

Vesting refers to how much of the employer match fund you "own." When you are 100% vested, the employer match is yours permanently. As far as computation of your match, refer to your specific plan details. All plans vary.

Two diff things going on here..contributions and distributions.

the match is a contribution. It's based upon a formula that is spelled out in your plan document. The formula can be generic such as "a discretionary amount" or specific such as "100% of first 6%". It has to be contributed or deposited into the trust within a very specific period (no later than the extended due date of the company's tax return) in order for the company to get a tax deduction for the contribution.

Vesting deals with how much you will get when you take the money out (take a distribution). It is based upon years of service with the company. A year of service can be based upon your hire date or how many hours you work in a year. Most companies use 1000 hours (maximum allowed) to determine a year of service. Vesting starts immediately upon hire but really has no relevence until the distribution actually takes place. Until then it's just to give you an idea of how much of the contributions you WOULD receive IF you were to take a distribution at that point.

Vesting is how long it takes for employer contributions to become all yours if you leave the company (or otherwise terminated). They should still match the 6% each year, but if you leave before you are vested, they take some of that employer contribution back. Any money you contribute is always yours.

Employer matching starts from the beginning. However, if you leave the company, you only get to keep the matching funds up to the percent you are vested.

For example, if you leave after 2 years, you would only get to keep 40% (20% for each year) of the 6% employer matched.