Browsing: TSP loan

Q. I have a question about repayment of a TSP loan. I want to either up my TSP contribution to 10 percent ($384 a pay) or up my loan payment by $384. What is the better financial decision? Either way, the same amount of money is going into my account, so other than the tax effects is there a preferred option? What about using the $384 to pay off consumer debt? I could pay off a credit card in about six months if I added the biweekly amount I would put into my TSP to my credit card, but obviously…

Q. I made a $50,000 loan to my TSP account. I separated from active-duty service. Now I’m being asked to pay the $40,000 remaining balance in full. If I allow the TSP to close the loan, can I move the funds to an IRA within two months after the loan is closed? If this is allowed, what IRA publication covers this transaction? Or would the best course of action be to pay the loan in full to TSP?

Q. I would like your opinion about borrowing from the TSP. This is my financial situation: Second house mortgage, $33,000, at 8 percent interest. First mortgage, $179,000, an ARM at 4 percent interest. Student loan, $19,000, at 7 percent. I am thinking about taking a $50,000 loan from the TSP and paying the second mortgage and the student loan. Another option is refinancing the mortgages at 4.5 percent fixed and just continue paying the student loan at the current rate. I am afraid of borrowing from the TSP and lose on potential future earnings, but I don’t want to continue paying so…

Q. I am looking for a clear answer in regard to TSP home loans. I am considering retirement in the next year. I am eligible to retire today. If I utilize a TSP home loan now for my primary residence (and planned retirement residence) and retire before the loan is paid in full, will I be hit with a penalty? Can I utilize a one-time payout at time of retirement to pay the loan in full without incurring a penalty?

Q. I have a TSP with the federal government and intend on leaving employment with the VA system and go work at another facility, outside the government. Can I take my TSP with me? Also, I have a TSP loan on which that I am making payments. If I am not working for the federal government, how does it work with paying the loan back? And can I roll my existing TSP money into a 401(a) or 457(b)?

Q. I will be 58 in May. I have a massive credit card bill that is causing me huge amounts of stress, and it is costing me $100 per month in interest. No, I wasn’t frivolous in my spending, I have a disabled daughter who I have been helping out in addition to her two service dogs. Can I take money out to pay off the credit card even though I currently have an outstanding TSP loan? Or can I cancel my loan and use that $300 per month to add to my credit card debt? If I could do…

Q. I am 38 years old and I have seven years in the system. I plan to purchase a new home this year as my primary residence. I am considering taking out a TSP residential loan to increase my down payment. What are the pros and cons of the TSP residential loan? Is the interest paid back to the loan going into my TSP account? Are there any tax repercussions?

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