- Your unemployment benefits are reduced when you cash out a 401k plan in certain circumstances. This money is treated as income to you. The income you receive from your 401k plan then offsets any money you receive from Missouri. The state is one of many states which also reduces benefits according to when you receive this money.
- All 401k plan money you receive from an employer outside of your base year period will not result in a decrease of unemployment benefit payments. Your base year period is the period used to calculate your Missouri unemployment compensation. The state uses a simple table reference to determine your base year period.
- Any 401k plan money you withdraw from an employer you worked for during your base year period may reduce your unemployment insurance benefits in Missouri. The reduction only takes place when contributions were made to your 401k during your base year period as a result of your employment with the company. The amount reduced is equal to 100 percent of your 401k plan distribution. If you cash out your 401k, this likely disqualifies you from receiving unemployment insurance payments.
- You may use cash value life insurance and Roth IRA withdrawals up to the total amount of your contribution amount, and you may sell off any assets you no longer want and still keep 100 percent of your unemployment benefit payment. These transactions are not counted in the calculation to determine benefit payments. Alternatively, you may draw on Social Security, if you're eligible, as this also will not reduce benefit payments.
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