Q. Which account does my Thrift Savings Plan loan come out of? If I have enough in the G Fund, will TSP take the loan directly from the G Fund, or will it take the money out proportionally? For instance, I want to take a $35,000 loan, and I have enough in the G Fund to cover that loan, and I would prefer that the entire loan come out of the G Fund. But if the loan is taken out proportionally, does that mean 80 percent of the loan comes out of my stock funds, 5 percent out of the F Fund and 5 percent out of the G Fund if that is how my account is proportionally separated? If done proportionally, then am I better off shifting my entire account into the G Fund, taking the loan, and then buying back into the stock funds?
A. A loan reduces your invested balance without changing the existing asset allocation.