Will I get full unemployment benefits if I recently cashed out a 401K prior to be terminated?

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Will I get full unemployment benefits if I recently cashed out a 401K prior to be terminated?

Asked on September 7, 2010 under Employment Labor Law, California

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Unfortunately it will effect your unemployment. They will take the gross amount that you are cashing out (including what you contributed, even though it is money you already earned, and what your employer contributed) and temporarily stop your payments. In other words, it will delay any unemployment benefits if you cash out your 401K. The fees/extra taxes will leave you in the negative for unemployment purposes since they will go by the gross amount you cash in and will not figure in the fees or taxes.

What you should do now is to consult with an account as to all of this.


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