Hidden80 is Wonderful. 10 years ago I did these things before I was collecting UI. Or you can actually put the money back over those three years. i Comstock/Comstock/Getty Images. If you're taking regular monthly withdrawals, the state divides that amount by 4.3 to arrive at a weekly amount you're receiving, and then deducts 50 percent from the weekly unemployment benefit. Collecting nj unemployment benifits and withdrawing from my 401k (claim, work, money) User Name: Remember Me : Password : Please register to participate in our discussions with 2 million other members - it's free and quick! So I recently began collecting unemployment after being laid off in Colorado. You can also avoid the 10% early withdrawal penalty if early distributions are made as part of a series of substantially equal periodic payments, known as a SEPP plan. Employer sponsored retirement plans offer automatic retirement savings and tax deductions while you are employed. Be careful on these issues.Your employer will fight your unemployment application. I got denied my unemployment benefits in January and had to take my 401k out total of only $12,000 paid off medical bill and my car. We are all from ohio. Can You Still Contribute to a 401k After You Start Taking RMDs?. I can only tell you that I would not. Some forums can only be seen by registered members. I would like to rollover my lump sum pension and termination money into an IRA. This is an early withdrawal and is subject a 10% penalty, in addition to income tax, unless you qualify for an exception. It is based on the amount you earned while you were employed and why you became unemployed. Ask Question Asked 7 years, 4 months ago. We are all from ohio. Another option is to take what the IRS dubs "substantially equal periodic payments" from your IRA while unemployed. Would that delay me getting unemployment like a severance would? How to Calculate Tax to Withhold on a 401(k) Distribution . I was wondering if that would delay my unemployment at all? To encourage retirement saving, the IRS slaps you with a 10 percent penalty if you siphon money from your 401(k) before reaching 59 1/2, even if you can prove a financial hardship. Your unemployment benefits will be assessed alongside the amount that you withdraw from your 401k plan. Dear Pete: I withdrew $75,000 from my 401(k) a couple of weeks ago because I was laid off. Generally, all other income is deductible from a claimant's unemployment insurance benefits, including 401(k) benefits. Periodic Payments. However, the money accumulated in a 401(k) retirement plan can not continue to … Let me ask you a question would you go borrow $10,000 at 40% interest? - Answered by a verified Employment Lawyer - Answered by a verified Employment Lawyer We use cookies to give you the best possible experience on our website. We would be able to live off her income alone (meagerly) in case I don't find something soon, but I'm leery of using up my retirement money since I am a little older. While the penalty disappears after 59 1/2, you'll still be liable for the income taxes. This is on top of regular income taxes on the withdrawal. You will still owe taxes on your withdrawals, unless the money … I was considering pulling out my 401k to pay off all our bills instead of bankruptcy. I know that it is tough to not use the money with it laying right there but try not to it will pay off in the long run. Ohio unemployment laws do not regard cash withdrawn from savings accounts or the money collected from the sale of unappreciated assets as income subject to offset rules. I live in Washington state. I had no choice since $160 per week does not pay my bills. 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