Second house purchase


Q. I am a 61-year-old CSRS retiree. I have approximately $120,000 in the TSP. I do not plan on touching the money but leaving it as an inheritance to my children. Recently, however, with housing prices being low, I have thought about cashing it out and buying a second home in Florida ,which of course the children would also inherit. This would give me a second home with no mortgage. Would the tax on the withdrawal make this a foolish move?

A. It’s not foolish to use your money to live your life the way you want. The taxes will have to be paid, sooner or later, in any case. Before you do it, though, you should determine whether it might be to your advantage, tax-wise, to spread the tax burden over multiple years by mortgaging the property and then paying it off using a partial and final lump-sum withdrawal or by taking monthly withdrawals from your TSP account, rather than taking it all in one lump sum.


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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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