Q. I want to pay off $70,000 in student loans. I have enough money to either use home equity or a post-service TSP partial withdrawal. I am a 54 year old with 100 percent total and permanent disabled veteran/FERS annuitant. Is one option better than the other?
A. It sounds like you will qualify for a penalty-free TSP withdrawal, so the choice is not easy. It’s not possible to know which will be to your advantage, since a lot depends upon what happens with interest rates and your TSP investment returns.
Both options should be considered, and I think that, if it were my decision, I would favor the home equity line for as long as the interest rate stays low, and use the TSP, as needed to make the payments or pay off the loan.
