Q. I have a Thrift Savings Plan loan and I am retiring. I’m reading everywhere and understand that I must pay back the loan to avoid a taxable distribution. What is the time frame for that? Your reply to someone last year was, “Your loan balance will be automatically declared a taxable distribution if you fail to repay it after you retire.” But is there is time frame after I retire? Does it have to be paid by the day I separate, or can it be paid a few weeks after my official date of retirement?
A. You will have 90 days from the date that the TSP receives the separation code from your agency. You will receive a letter from the TSP advising you of the deadline.
