Two ways the same thing happens — equity unlocking over time. Cliff vesting is binary and lumpy. Graded vesting is gradual and steady. Each one shows up in different places and asks for a different reminder strategy.
Cliff vesting holds everything back until a single date, then releases a chunk all at once. Graded vesting releases small pieces from the start, year after year or month after month. Cliff is the line in the sand. Graded is the slow ramp.
Most startup equity grants use both: a 1-year cliff (cliff vesting for year one), then monthly graded vesting for the remaining three years. Most 401(k) employer matches use pure graded vesting, often 6-year graded starting at 20% in year two. Read the vesting cliff pillar for why the cliff date is the one you absolutely have to remember.
Set a reminder for whichever vesting date matters most to you.
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Industries and plan types lean one way or the other. Knowing where you are tells you which to expect.
| US startups (stock options, RSUs) | Cliff + graded combo. Default: 1-year cliff, then monthly graded for 3 years. |
| 401(k) employer match | Often graded (e.g. 6-year, 20% per year from year 2). Some use 3-year cliff for safe harbor plans. |
| Pension plans (defined benefit) | Most use 5-year cliff or 7-year graded under ERISA rules. |
| ESOP (employee stock ownership) | Typically 6-year graded or 3-year cliff, governed by IRS rules. |
| Late-stage tech grants | Sometimes shorter cliffs (6 months) or no cliff at all. Refresh grants often skip the cliff. |
Three common schedules side by side, all on a hypothetical 100-unit grant.
4-year vest, 1-year cliff, monthly after
IRS-compliant graded, 20% per year
Safe-harbor cliff, all-or-nothing
The schedule changes which dates are worth tracking. Match the reminder to the shape of the vesting.
Either way, the goal is the same: do not let the date live only in a document you signed years ago. Find your date, then set the reminder once and let it do the work.
Cliff vesting is all-or-nothing at a single date — you get 0% until the cliff, then a big chunk vests at once. Graded vesting is incremental — a small percentage vests each year (or each month) from the start. Cliff is binary, graded is gradual.
Startup equity grants almost always use cliff vesting (typically 4 years total with a 1-year cliff). 401(k) employer matches frequently use graded vesting — a common IRS-compliant schedule is 6-year graded at 20% per year starting year 2. Some 401(k) plans use a 3-year cliff instead.
Graded vesting is friendlier in the short term — you start owning something from year one or two. Cliff vesting is riskier early (lose everything if you leave before the cliff) but typically grants a larger chunk at the cliff date. Which one is "better" depends on how long you plan to stay.
Yes — and this is the most common setup at startups. A 4-year grant with a 1-year cliff is cliff vesting for year one, then graded (monthly or quarterly) vesting for years two through four. The cliff and the gradual schedule coexist in the same agreement.
A typical IRS-compliant 401(k) graded schedule: 0% after year 1, 20% after year 2, 40% after year 3, 60% after year 4, 80% after year 5, 100% after year 6. Another common one: 5-year graded at 20% per year from the start. The exact schedule is in your plan summary.
Cliff vesting has one make-or-break date — the cliff. A single reminder set 30+ days early is usually enough. Graded vesting has multiple smaller dates spread over years. You may want a reminder for each tranche, or a single annual reminder around your anniversary to check progress.
Straight-line is a type of graded vesting where each unit vests at the same rate over time (e.g., 1/48 of a grant per month for 48 months). Graded is the broader term and can include uneven schedules (e.g., back-weighted or front-loaded grants). All straight-line schedules are graded; not all graded schedules are straight-line.
Whether it's a cliff or a graded anniversary, set a free email reminder so the date stops living in your head.
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