Taking a pension will impact unemployment in some states. If you are qualified for 2000 a month unemployment but your pension is 2100 a month you are out of luck. However if pension is 1500 a month you can draw the difference.
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IMO, it depends on the individual, risk tolerance, timeline, life circumstances. I had long considered that my pension wasn't going to sit in the pension plan for another 10 yrs (I was surplus'd last yr @ 55). Sure, it is great with the monthly contributions while still an employee, but it doesn't really grow much after that. My pension wasn't all that large, to begin with. I rolled mine into an IRA after discussing it with Fidelity. At the time, I was sure there were economic headwinds coming due to trade wars and debts from the recent tax cuts and deemed it a safer bet to park it in a fixed-differed-annuity (there are many types of annuities, some mimic a pension monthly payment plan, some are quite expensive) for a couple of years. Most of my IRA is in equities as I an viewing a longer time horizon. If I was older and/or had a larger pension and felt confident in the direction of the company, I may have considered differently. Good to review the plan documents and seek out advice to make an informed decision.
OP is correct. If you take the annuity (monthly check), then you probably will not be able to collect unemployment as they consider that as monthly income. This happened to 2 friends of mine who were surplussed in 2019. This does not apply if you take the lump sum.
In most cases, unless you don’t expect to live long, you will collect much more money by taking your pension as a monthly annuity, rather than taking a lump sum.
T wants you to to take the lump sum to get the pension liability off its books.
Beware of financial planners who tell you to take the lump sum—they want to invest it for you and earn commissions.
Most employees won’t be able to invest the lump sum and earn more than the monthly annuity, with stock market risks, commission fees, low interest on safe savings accounts, etc.
The monthly pension annuity also gives you financial security and peace of mind, for the rest of your life.
Do the math—the lump sum is considerably less than the monthly annuity payments, over your expected life span, for most people, unless you have a serious health condition and don’t expect to live long.
I calculated the future value of my lump sum @ 55 years vs collecting lump sum @65. If I can earn more than 4.15% in the next 10 years, it’s better to take the lump sum now instead of waiting until I’m 65 years old.
" I may be wrong here but if you take the lump and roll into 401k it doesn't affect unemployment since you're not getting monthly annuity payments."
You're not wrong. And smart to take the lump and invest it. Most will wind up with more $$ that way.
I many be wrong here but if you take the lump sum and roll into your 401k it does not affect unemployment since your not getting monthly annuity payments.