withdrawal from IRA affects unemployment benefits?

[ogm]

I am in TEXAS and am currently receiving unemployment benefits. If I withdraw one lump sum from my (traditional) IRA account, how will that affect my unemployment benefits? Example, will it lower it or altogether stop it?

[ecmst12]

It may be considered income or it may not. The best people to ask this question would obviously be the unemployment board, have you tried asking them?

[pattytx]

I don't think so, because the withdrawal is not earnings, it's a return on investment plus your own money.

Commentator?

[RufusQuail]

Originally Posted by ecmst12

The best people to ask this question would obviously be the unemployment board, have you tried asking them?

They are not the best people to ask. They are likely to think of all retirement accounts as the same. They may not know there is a difference between an IRA and a pension. If you report an IRA withdrawal, they are likely to deduct it from your benefits.

Pension income is an issue because employers still fund them. With unemployment compensation, that would be a double dip for the terminated employee.

Unemployment benefits are not welfare. You don't have to be destitute to qualify. If you are lucky enough to have savings to fall back on, you are free to use those funds while you are receiving unemployment.

More here: [url]http://online.wsj.com/article/SB125399732556243613.html[/url]

[ecmst12]

I was suggesting that OP ask BEFORE making the withdrawal, not after. And if someone doesn't know the difference between an IRA and a pension, they have no business manning the phones at the unemployment office. That's basic training.