Will my unemployment insurance be affected if I withdraw my 401K when let go?
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Will my unemployment insurance be affected if I withdraw my 401K when let go?
I am being let go of my job at the end of Sept. I will be collecting unemployment. new York state. I want to withdraw all of my 401K. Will this affect my unemployment at all?
Asked on July 26, 2016 under Employment Labor Law, New York
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
Unemployment is affected by wages or salary you earn *while* collecting unemployment, since you can't work and get unemployment at the same time. (Or you can, as long as you're not earning much, and whatever you do earn will be an offset against and reduce your UI.) However, the money in the 401 is either compensation previously earned (e.g. any company match) or your own money invested in the 401 (your contricutions). Therefore, withdrawing money from your 401k will not affect your unemployment benefits.
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