18 Sep Can I get unemployment if I take early retirement?

Q. I’m 55 years old and I was offered a voluntary early retirement package. If I accept the package, I plan to seek other employment. Would I be eligible for unemployment benefits during the time between jobs?
— Considering

A. It will depend on how the retirement package is classified.

If it is considered severance, you are in luck as the state of New Jersey does not consider severance pay to be income when calculating whether or not a person should be able to receive unemployment, said Joseph Sarnecki, a certified financial planner with U.S. Financial Services in Fairfield.

“The only way this can affect your ability to collect is if you remain on the active payroll and it is considered an extension of your employment relationship or a continuation of benefits,” Sarnecki said.

When you can collect may depend on how you are receiving your retirement buyout, he said.

“If multiple payments are being made through their payroll system, they may delay benefits,” he said. “If you receive a lump sum package, you would be able to apply for benefits immediately.”

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This story was originally published on Sept. 18, 2020.

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