Paying off loans with TSP funds


Q: I have a question regarding borrowing against my Thrift Savings Plan and would like your opinion on the scenario as to whether it would be worth it. I am 52 years old and have eight years as a Federal Employees Retirement System employee, and I intend to do 12 more years for a total of 20 years before I retire. Currently, I contribute approximately $600 each pay period into my TSP account, which currently totals about $100,000. I have about $20,000 in loans. Would it be sensible to borrow $20,000 against my TSP to pay off the loans? Or should I leave my TSP alone? I intend to continue contributing $600 each pay period into my TSP account and set an allotment of $250 each pay period for loan re-payment. I estimate the loan to be repaid in about 38 to 40 months.

A: It’s a reasonable thing to consider as long as freeing up the credit doesn’t wind up leading you to take on more debt that wouldn’t otherwise accrue.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

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