Mortgage and C Fund


Q. I retired Jan. 31, 2013. I have more than four years left on my mortgage. I owe about $25,000 on my loan. I was thinking of taking a lump sum from my Thrift Savings Plan for about $20,000 and use my tax refund to make up the difference I would owe. I have about $120,000 in my TSP. I’ve had it in the C Fund, which is doing very well. Do you think it’s a good idea to take a lump-sum withdrawal to pay off my mortgage? It would save me $900 per month, which is what I’m paying for my mortgage.

A. If you plan to leave all of your money in the C Fund going forward, it might be smart to use some of it now to pay off your mortgage before you lose it. You should note that the C Fund isn’t “doing very well,” it has done very well. Those are two different things. The question you should asking is: “What could it do in the future?” Since 2000, it has lost half of its value – twice.

The best decision about your mortgage will depend upon a number of factors, including your tax returns, how you will manage the money going forward if it’s not used to pay off your mortgage, the terms of your current mortgage and the demands you will place on your TSP account in the future.


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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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