Can I withdraw money from my 401k while collecting Washington ESD unemployment?

Thanks! Do I need to report the withdrawal to Washington ESD when I file my weekly claim?

No, you don't report 401k withdrawals on your weekly claims. Only wages from work need to be reported.

Ouch that's brutal. Did you have them withhold taxes when you withdrew or did you just pay it all at once?

I had them withhold 20% but it wasn't enough. Should have done more withholding.

Interesting, I've never heard of that. Is it legit? I've been trying to call for weeks about some other issues with my claim.

Yeah it's legit. I used it when my claim got stuck in adjudication. Way better than sitting on hold for hours or getting disconnected.

That sounds too good to be true honestly. How much does it cost?

I haven't really looked into that stuff. Do you know where to find information about those programs?

Start with 211.org or call 2-1-1. They have info on all local assistance programs. Also check with WorkSource offices.

30%? That seems really high. What was the breakdown?

10% early withdrawal penalty plus like 22% tax bracket. yeah it was painful

I've already maxed out my credit cards and don't really have family to borrow from. I've sold what I can.

Man that's rough. I guess retirement money is better than going homeless. Hope things turn around soon.

Good point. Also some plans let you take a loan instead of a withdrawal, which might be better if available.

I'll check if my plan allows loans. That might be smarter than a full withdrawal.

Yeah I'm thinking I should probably talk to someone who knows taxes before I make any big moves.

How does it work exactly? Do they just keep calling until someone answers?

Pretty much. You put in your info, they call repeatedly until they get through, then conference you in with the ESD agent. Super simple.

Yeah I'm doing my three job contacts per week. It's frustrating though - hardly anyone is hiring in my field right now.

I know it's tough. Maybe consider expanding to related fields or remote work if possible. The job market is weird right now.

I don't think they monitor your bank account unless there's reason to investigate. 401k withdrawals are legitimate and documented.

Yeah they're not looking at your bank statements unless you're under investigation for fraud or something.

Right, honesty is always the best policy when dealing with government agencies.

Tell me about it. The maximum weekly benefit in Washington is what, like $999? That doesn't go far these days.

It's actually $999 max per week but most people don't get the maximum. Depends on your previous earnings.

I'm getting $627 per week which sounds like a lot but after rent and bills there's not much left.

Good advice. Maybe I'll have them withhold extra taxes when I make the withdrawal to be safe.

What about if you withdraw from an IRA? Same rules apply?

Yes, IRA withdrawals are the same - not considered wages for unemployment purposes.

I actually watched the video you linked and it looks pretty straightforward. Might try it if I need to call ESD again.

Thanks everyone for all the advice. This thread has been really helpful. I feel better about my options now.

Appreciate the encouragement! Hopefully I'll find something soon and won't need to touch the 401k at all.

Agreed. The tax implications are something a lot of people don't think about until it's too late.

Very true. I'm hoping to only take out enough to get through the next couple months while I keep job hunting.

That's really smart advice about doing a detailed budget first. I think I was panicking a bit and just thinking about withdrawing a big chunk, but you're right that I should figure out exactly what I need to get by. Do you remember if the hardship withdrawal options actually had better terms, or was it just easier paperwork? I'm definitely going to call my 401k provider tomorrow to see what options they have.

In my case, the hardship withdrawal had the same 10% penalty but some providers waive their administrative fees and make the process faster. The paperwork was definitely easier - just had to show proof of unemployment rather than jumping through other hoops. It's worth asking about because even saving $50-100 in fees helps when money is tight. Also @4c9bd1943bf6 since you mentioned you're getting $627/week in UI, definitely do that budget calculation first. You might find you need way less than you think, especially if you can stretch it over a few months instead of all at once.