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  1. #1
    jcmadrid is offline Junior Member
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    will a cashing out a pension at 24yrs old. affect my IL unemployment benefits??

    What is the name of your state (only U.S. law)?
    Illinois
  2. #2
    I'mTheFather is offline Senior Member
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    Third time's the charm. Gonna try again?
  3. #3
    jcmadrid is offline Junior Member
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    sorry im new to this forum. question is I've been collecting unemployment since october 2010. I have a employer funded pension that I cashed out earlier this year. Do I have to report that lump-sum early withdrawal to my unemployment office? I am 24 years old, and live in illinois. Ive been losing so much sleep over this.
  4. #4
    swalsh411 is offline Senior Member
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    That money isn't wages, so no.
  5. #5
    jcmadrid is offline Junior Member
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    im sorry for posting duplicate threads, i sent that from my phone and somehow I messed up. Now it isn't considered income even though I'm getting taxed on it? Some websites say I have to report it and some don't. :/ Guess I'll call the local office just to be on the safe side, I sure hope you're correct.
  6. #6
    commentator is offline Senior Member
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    No, since you are NOT receiving it as a monthly pension, since you of course are not eligible to draw it out this way at your age, this is not considered receiving a pension. This is drawing it out in a lump sum, which is NOT reportable income for unemployment purposes. Unemployment beneifts are not based on your income. You could come into any amount of income, find a bag of cash, inherit big, win the lottery, and still qualify for unemployment benefits. Whether it is taxable is not the deciding factor, it is whether it is actual work for wages or a pension that you began receiving in a monthly increment based on your age and eligibility to receive it. Social security retirement benefits are not a pension, incidentally, not important to you, but might be important for another questioner to know.

    But yeah, calling the unemployment system is the first and most important place to start. And even there, sometimes people get whacked advice from inexperienced workers. Be sure you make a note of the date you called, who you spoke to and what you were told. Looking at random internet web sites is the very worst place to get advice.

    If you were to report this money on your weekly certifications for benefits, though, it would do nothing but stop your claim while an investigation was done, and then you'd eventually be told the same thing, that your unemployment benefits are not affected by this taking out of a pension at your age.
  7. #7
    jcmadrid is offline Junior Member
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    Would it be the same situation If I pulled out the first half of my pension out earlier this year (hardship withdrawal). Then pulled out the second half say in January?
  8. #8
    commentator is offline Senior Member
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    You are not drawing it in monthly increments because you are old enough. That is what would or would not make it reportable. So, no difference. You are too young to draw a pension.
  9. #9
    Betty is offline Senior Member
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    Agree, this is not considered "earned" income & is not reportable for UI purposes.
  10. #10
    justalayman is offline Senior Member
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    Quote Originally Posted by Betty View Post
    Agree, this is not considered "earned" income & is not reportable for UI purposes.
    I hope you folks are speaking to Illinois specifically because I know Indiana treats such income differently. I inquired about withdrawing an annuity (can't remember the code it is directed by) and a 401k and both would affect my unemployment in Indiana.
  11. #11
    Betty is offline Senior Member
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    justalayman, checking further it seems regardless of the state you live in UI benefits are normally reduced when you withdraw/cash in a retirement plan (ie pension/401k) that the employer contributed to or partly to. That seems to be the case in OP's situation.

    Your contribution (if any) can be taken out w/o any reduction in benefits. This money can help you pay bills etc. w/o reducing what you get from the state.

    It would be best if the OP called the UI office & talked to them.
  12. #12
    justalayman is offline Senior Member
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    Quote Originally Posted by Betty View Post
    justalayman, checking further it seems regardless of the state you live in UI benefits are normally reduced when you withdraw/cash in a retirement plan (ie pension/401k) that the employer contributed to or partly to. That seems to be the case in OP's situation.

    Your contribution (if any) can be taken out w/o any reduction in benefits. This money can help you pay bills etc. w/o reducing what you get from the state.

    It would be best if the OP called the UI office & talked to them.


    In one of my accounts, it was totally employer contribution. In the other, it was a matched funds situation. Indiana UI didn't say anything about a difference although I did not carry it through to actually withdrawing that account (401k with matched contributions) while on UI so what I was told may not have been totally accurate. They seem to pull answers out of their nether regions sometimes with no actual support.



    I agree it would be a good idea for OP to call the UI folks and ask before taking any actions.
  13. #13
    Betty is offline Senior Member
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    Yep, this stuff can get confusing "sometimes" & it's probably best for OP to verify with UI office & hope they give OP correct info. It seems OP already cashed out employer funded pension plan.
  14. #14
    justalayman is offline Senior Member
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    Quote Originally Posted by Betty View Post
    It seems OP already cashed out employer funded pension plan.
    I see that. Hopefully it works out well since it's too late to really change anything.
  15. #15
    jcmadrid is offline Junior Member
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    Called UI yesterday, just so happened the lady i talked to handled most of the judications. She had told me that yes I do have to report the lump-sum payment and that I would have to bring in the stub showing the payment. I was told that I would lose just the one week of benefits, and that their would be no reductions or any changes to my existing benefits. Great News

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