Jul / 22

401K cash out count against Food stamp eligibility?

                        I'm kinda confused I had cashed my 401k out which was $4k so I wouldn't stress about rent if I didn't get unemployment but I got my first unemployment check a month and a half from the separation from my employer. My social worker said I cannot have more than 2k in my bank account as I need to send her a bank account for my initial intake. . .so I'm figuring with school coming up for my 3 kids I've bought backpacks and shoes and paid up to date bills. . .so will just the initial month I will get nothing but then after I will get Food stamps if my bank account is under 2k in assets? as far as my unemployment checks yes I do qualify for food stamps while getting the unemployment.
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  • Jerry Sep 17
    The original amount of your 401k, before penalties and taxes, will be counted as income. My suggestion is to suspend your application for assistance- you will be denied with over 2k assets and have to reapply. When you apply, they will ask for ALL income and assets. They will need your unemployment determination and bank statements. If you've already cashed out the 401k, put the remaining amount in a money market account under your children's name. This way, you are investing in your child's future AND if things get really desperate, you can access money market funds with a checkbook. After you have the 401k proceeds put away for the children or alternately in a Roth IRA (although this cannot be liquidized in an emergency) , these monies won't count against your aid determination.