Will my retirement account stop me from getting unemployment benefits?
Q. Due to a workforce reduction, I was terminated by my former employer. Shortly after, I took my retirement account, fully funded by my former employer, in one lump sum and rolled it over to my IRA. Does this impact my eligibility to collect unemployment benefits?
— Not working
A. We’re sorry to hear about your job.
To qualify for New Jersey Unemployment Benefits you must have lost your job through no fault of your own, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.
You must be able to work, are actively seeking work, are available for work and you cannot refuse an offer of suitable work, he said.
“If you received severance pay, vacation pay or unused sick pay you will not be eligible for unemployment for the duration of the payments,” he said.
Unemployment compensation is not means tested, which means eligibility does not require the applicant to be poor. So, no matter how much money you have in the bank, you can still receive benefits, Kiely said.
“The fact that you rolled your company retirement benefits into an IRA account should have no bearing on your eligibility to receive benefits,” he said. “If you left your job and begin receiving lifetime pension or 401(k) payments, you won’t be eligible for unemployment because you would be considered retired and no longer in the workforce.”
Good luck to you.
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Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com’s weekly e-newsletter.