Lump sum vs monthly withdrawal


Q. I am currently a CSRS employee with 37 years of service. I plan on retiring in two years and would like to make a withdrawal from my TSP to pay off the remaining balance on my child’s college tuition and possibly pay off a few other debts to be able to retire without debt. Is there any advantage to, or advice you can give on making a lump sum withdrawal and pay off the debts immediately versus a monthly withdrawal covering the debt amounts until the debts are paid off?

A. What will work out best for you depends upon a number of factors, including things beyond your control like investment returns. I think you should start with planning to take the lump sum and pay off the debt and then see if you can come up with a good reason to do it another way. If the interest rate on the debt is fixed and low and you are a good investment manager, for example, then you may want to consider delaying some or all of the repayment.


About Author

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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