Q: I have $110,000 in my TSP account. I took out $40,000 for a home loan, and I still owe $25,000 on it. I want to retire in April 2012 at age 56. How will the unpaid loan be handled? How much will come out of the $110,000 I have in the account?
A: The unpaid loan balance, including interest, will be declared a taxable distribution from your account.