Mortgage and retirement


Q. I plan to retire from the federal government in the near future (I will have 32 years). I wish to pay my house off ($74,000) with my Thrift Savings Plan earnings. Is this a good idea? The interest rate on my house is 5.75 percent, and I realize that 20 percent will be taxed when I decide to withdraw from TSP. Should I transfer to an outside facility? I do not wish to have a house payment when I retire.

A. It’s impossible to say whether this is a good idea for you without understanding and analysis beyond the scope of this forum. In general, if you can refinance your mortgage into a lower, fixed 30-year rate, it would probably be better to do so and keep your TSP money available to pay your bills, later. I wrote on the subject here:

If you’d like decision support on this issue, I can provide it. Visit to learn more about my practice.


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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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