Leveraging a TSP loan


Q. Do you have a follow-up on a way to leverage a TSP loan? I thought it might be a good idea to take out a loan against the TSP and put it into a real estate investment trust such as MTGE or CIM that pays pretty good dividends and have those dividends pay back the loan payments. Do you have any articles about leveraging a loan against the TSP?

A. No, I have not written an article on this. It occurs to me that there is no “leverage” that results when you borrow the money from yourself. You’re simply suggesting that you borrow the money to enable you to take more risk than is available from the TSP’s existing funds. The S Fund isn’t risky enough for you? I don’t see the advantage if your goal is to maximize retirement income.


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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 fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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