Debt worry and the TSP solution


Q. I am 67 with $360,000 in TSP and 29 years of federal service. I am also $26,000 in credit card debt at 16 percent annual interest rate. I am vacillating between an age-based in-service withdrawal and a 2.35 percent TSP loan to pay off the credit card debt. Finance-wise, I suppose it makes sense to pay off the credit card with the TSP loan, ($630/mo over 5 years versus $460/mo), but what I’d really like to do is get rid of the debt entirely and not have it hanging over my head at all! I am aware of the TSP in-service penalties and implications, but I’m thinking one day I’m going to have to pay taxes on the TSP anyway, so why not do it now and get this worry off my mind?

A. Before you decide, you should project where you’ll be, financially, after 5 years under each scenario. How you spend, save and manage your investments will have a big impact on the outcomes.


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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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