Buyback value


Q. I am in a position to buy back five years and nine months of service for just fewer than $5,000. At 63 years old, I have 26-plus years of service before the buyback. I wanted to take a TSP withdrawal to pay it back. If I withdraw that amount, do I have to pay it back? Would it make a significant difference for my retirement to buy that time back? What would the trade-off be concerning a withdrawal to the benefits received with the bought-back time?

A. The only answer I can provide with the information available is that if you haven’t already done so in the past, you may take an age-based, in-service withdrawal to make the payment. This will not have to be repaid. Alternately, if this is no longer available to you, you may take a loan to make the payment, borrow enough to also cover the loan payments until you retire and then allow the remaining balance to be declared a taxable distribution after you retire. Whether it’s a good idea to do this, or not, can’t be determined without deeper analysis.


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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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