Does 401k affect unemployment benefits - NYS Department of Labor rules?
I'm planning to file for unemployment next week after my company laid me off. I have about $85,000 in my 401k from years of contributing. Before I submit my claim, I need to know - will having this 401k balance affect my unemployment benefits with NYS Department of Labor? I'm not planning to touch it at all, just want to make sure it won't reduce my weekly benefit amount or cause any issues with my claim. Has anyone dealt with this before?
13 comments
Join the conversation
Aliyah Debovski
Your 401k balance won't affect your unemployment benefits at all. NYS Department of Labor only looks at your wages from work when calculating your weekly benefit amount. Retirement accounts like 401k, IRA, etc. are not considered income for unemployment purposes. You're good to file your claim without worrying about this.
0 coins
Ally Tailer
•That's a huge relief! I was worried I'd have to report it somehow. Thanks for clarifying the NYS Department of Labor rules on this.
0 coins
Miranda Singer
wait what if you take money OUT of your 401k though? like if i need to withdraw some to pay bills while waiting for unemployment to kick in?
0 coins
Aliyah Debovski
•If you actually withdraw money from your 401k, that could be different. Any distributions might need to be reported as income. But just having the account sitting there doesn't matter for your UI claim.
0 coins
Cass Green
•I had to deal with this exact situation last year. I called the NYS Department of Labor hotline but couldn't get through for weeks. Finally used claimyr.com to get connected to an actual agent - they have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. The agent confirmed that 401k withdrawals do count as income and need to be reported on your weekly claims.
0 coins
Finley Garrett
omg thank god someone asked this!! i have like 40k in mine and was freaking out thinking it would mess up my benefits
0 coins
Madison Tipne
The distinction is important here - ASSETS vs INCOME. Your 401k is an asset, not income. NYS Department of Labor unemployment is based on your work history and wages, not your savings or investments. However, if you start taking distributions, those become income and could affect your weekly claim certification.
0 coins
Holly Lascelles
•This makes sense but why is the unemployment system so confusing about what counts as income and what doesn't? Like I'm scared to even check my bank account balance now in case that somehow affects things...
0 coins
Malia Ponder
been through this whole mess before... NYS Department of Labor doesn't care about your retirement savings until you actually touch the money. But good luck getting anyone on the phone to confirm this when you need it. Their customer service is absolutely terrible.
0 coins
Andre Lefebvre
Just wanted to add my experience here - I filed for unemployment last month and had the same concern about my 401k. The online application doesn't even ask about retirement accounts, only about work income and any part-time earnings. I've been certified for 4 weeks now with no issues. The NYS Department of Labor really does keep it simple - they just want to know about wages from employment, not your savings or investments.
0 coins
Carlos Mendoza
•Thanks for sharing your actual experience Andre! It's really reassuring to hear from someone who just went through the process recently. I was overthinking this way too much - sounds like the NYS system is pretty straightforward about only caring about work income. Did you have any other surprises during the application process I should know about?
0 coins
Amara Oluwaseyi
•@Andre Lefebvre That s'super helpful to know the application doesn t'even ask about retirement accounts! I was getting myself all worked up reading horror stories online about people s'benefits getting cut off for random reasons. Good to hear it s'actually pretty straightforward. How long did it take for your first payment to come through after you got approved?
0 coins
Kolton Murphy
I went through this exact same worry when I got laid off 6 months ago! Had about $120k in my 401k and was panicking that it would disqualify me somehow. But everyone here is absolutely right - the NYS Department of Labor only cares about your work wages for calculating benefits. Your retirement savings are completely separate. I've been collecting unemployment for months now with zero issues. The key thing to remember is just don't touch that 401k money while you're on unemployment, because then it becomes actual income you'd need to report. But as long as it's just sitting there growing (hopefully!), you're totally fine. Good luck with your claim!
0 coins