Payoff mortgage with TSP


Q. I am 65 years old and have been retired 5 years from USPS under FERS.  My mortgage balance is $58,500 at 4.5%.   I pay $665/mo. for principal and interest.  The mortgage balance will be paid off in Dec 2023. My TSP balance is $129,000 and all in the G fund earning 2.5%.

Right now I take monthly payments of $700 from my TSP.  I am thinking of increasing my monthly TSP payments (during open season) from the present $700 to $2,000.  I would then put an extra $1,200 per month towards my monthly mortgage payments.  I would then pay off the mortgage in Dec 2018.

Do you think this is a good idea?

A. It’s impossible to say what is best for you without a comprehensive understanding of your needs, goals, resources and constraints, but you should be cautious about committing to an investment in your home that is illiquid and will earn, effectively, the after tax cost of your mortgage interest for as long as you own the property. If you’re not sure, I think that you should keep paying the minimum payment on your mortgage and leave your money in the TSP for as long as possible.


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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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