TSP withdrawal strategy


Q. I plan to retire in January 2017. At that time I will have an outstanding general loan for which I will get a distribution statement. I have been told that this will count as my one lifetime withdrawal? What happens if I make an in-service withdrawal before I retire to pay off some other debts, and still have the outstanding loan at retirement?

A. The declared distribution will not count as your partial lump-sum withdrawal. In any event, an unrepaid loan will be declared a taxable distribution after you retire.


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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 fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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