Q. I am 59 and am going to retire next year. I am in CSRS. I have a loan on my Thrift Savings Plan, which, if I retire next year, won’t be completely repaid. Do I have to repay it, since it’s my money and I can withdraw all of my money from TSP when I retire?
A. No. If you don’t repay it, the outstanding balance will be declared a distribution and will be reported to you as taxable income. Since you are retiring after the year in which you reached age 55, there will be no early withdrawal penalty.