Will withdrawing from my 401k affect my ESD unemployment benefits?

Yes, 401k withdrawals can definitely impact your unemployment benefits, but it depends on how you take the money out. Here's what you need to know: - If you take a one-time withdrawal (like a hardship withdrawal), ESD generally won't reduce your benefits - If you start receiving REGULAR pension/retirement payments, ESD will likely reduce your weekly benefit amount - Loans from your 401k typically don't count as income for unemployment purposes The key is how you report it. On your weekly claim, you only need to report retirement income that's paid regularly like a pension. A one-time withdrawal isn't considered ongoing income. Make sure to check the specific instructions on the question carefully.

I did this last year and had no problems with my unemployment. Just took out $4000 to fix my car and pay some bills and didnt have to tell ESD about it. One time withdrawls are fine its not income

jst make sure ur aware of the tax penaltys too. i had to pay 10% extra tax plus my regular tax rate when i took $ from my 401k last year. it ended up being like 30% total taxes!! plus u have to claim it all as income on ur taxes which could push u into a higher bracket.

The exact wording of the weekly claim question is important here. It asks if you've received any "pension, retirement, or disability payments." One-time 401k withdrawals don't technically fall under this category since they're not regular payments. However, if you start receiving periodic distributions from your retirement account, that would count and would likely reduce your benefits by the following formula: - If your employer contributed 100% to the plan, your weekly benefit is reduced dollar for dollar - If contributions were split between you and employer, benefits are reduced proportionally to the percentage your employer contributed - If you funded it entirely yourself, there's no reduction I'd recommend calling ESD directly to confirm before making any withdrawals, as policies can change and your specific situation might have unique factors.

When I was on unemployment last year, I was in the same situation and absolutely could NOT get through to ESD to ask questions about my 401k. After spending days trying, I found this service called Claimyr (claimyr.com) that got me connected to an actual ESD agent in about 20 minutes. They have a video showing how it works: https://youtu.be/7DieNd3C7zQ?si=26TzE_zGms-DODN3 The agent confirmed that a one-time withdrawal wouldn't affect my benefits but gave me specific instructions on how to note it in my file. Definitely worth connecting with a real person at ESD before making financial decisions that could impact your benefits.

I'm actually an accountant (though not giving professional advice here!) and I'd strongly caution against taking money from your 401k unless you have absolutely no other options. Beyond the unemployment question, you're looking at: 1. 10% early withdrawal penalty if you're under 59.5 years old 2. Federal income tax (and possibly state) on the full amount 3. Loss of future growth in your retirement account Have you looked into other options like: - Hardship assistance programs through utility companies - Temporary assistance programs through local nonprofits - 0% interest credit cards for short-term needs - Unemployment extensions if available A 401k withdrawal should really be a last resort due to the long-term financial impact.

i borrowed from my 401k insted of taking a withdrawl cuz then i dont pay the penelty and i can pay it back when i get a new job. mayb check if ur plan allows loans??

WHATEVER YOU DO DON'T take money from your 401k while on unemployment!!! My cousin did this and ESD came after him for FRAUD and he had to pay back ALL his benefits!!! They watch everything!!

Thanks everyone for all the great advice! After considering all your suggestions, I think I'm going to: 1. Try to reach ESD directly using that Claimyr service to get official clarification 2. Look into a 401k loan instead of a withdrawal to avoid the tax penalties 3. Check out some of the hardship assistance programs mentioned Really appreciate all the help - this has given me a much clearer picture of my options!