Q. I have 19 years of federal service (counting the 10 years active duty I bought back). I am 51, and I fall under FERS. I don’t trust the government retirement system with what is going on in the economy and would like to invest in gold or silver, but I don’t trust it being in some IRA in another state, that if everything were to go south, I wouldn’t get anything anyway. Is there any way of withdrawing some or all of my funds without penalties to invest in hard assets? A. Not until you reach age 50½ or…
Browsing: TSP loan
Q. With regard to a Thrift Savings Plan loan, it’s my understanding that the funds borrowed are from my account (money I previously paid into my TSP account). Since I’m CSRS and the government doesn’t match any of my deposits, does the interest that I’d pay actually get paid back into my account? If not, why would I ever want to borrow my money, and then pay the interest back to some other entity? However, if the interest was paid back to my account, then I’d see no reason to not take out a loan. Furthermore, I’d see no reason to…
Q. If I take $40,000 for 15 years from TSP, using the calculator it shows that at the end of the 15 years, I would be paying $45,000. What happens if I pay it off in a year (for example, I come into some money, sell an investment property). Do I still pay that $5,000 in unpaid interest, or is the interest re-amortized to the current date of payoff? Basically, I need some extra money for a down payment on a new primary residence. If I take the loan over the 15 years, it is a very low payment ($112…
Q. I have an outstanding Thrift Savings Plan loan, and I just turned 59. I plan to continue to work for some time. After age 59½, can I pay off this TSP loan from other personal funds, then immediately withdraw those funds from the TSP without penalty if I need them for other purposes? With no loan balance remaining, would I then be eligible to take out another TSP loan? A. You may repay the loan, take a distribution and then take another loan, but 60 days must elapse between the two loans.
Q: I am about to retire. I still have a balance due on a loan from my TSP. Can I take the balance due as taxable distribution? I have already taken a one-time distribution after I turned 60. Or, do I have to pay it off before I can roll it into an IRA? A: Your loan balance will be automatically declared a taxable distribution if you fail to repay it after you retire.
Q: Before joining the government civilian workforce, I worked as a government contractor and contributed to the company’s retirement plan. When I left the company as a contractor and joined the government, I had to take my retirement fund and roll it over into another investment firm. At that time I put the money into a Franklin Templeton FTB and T Rollover IRA account. It has now been 10 years and the initial investment has only increased by 30 percent. First, can I re-roll that money into my TSP account (which I believe I can), and secondly can it be used…
Q: My wife and I will soon need money to pay for our son’s college expenses. We would either have to refinance our home using the equity that we have built up or take a loan from my Thrift Savings Plan account. The refinance would be at 4.25 percent over 20 years with approximately $2,000 in closing costs. The TSP loan would be at 2.875 percent for anywhere from one to five years for a $50 fee. What do you feel is the best option? Is the interest on the TSP loan deductible on my taxes? A: It’s impossible to…