How much tax on TSP loan default


Q. I’m at my MRA (56 years old/35-plus years service time). I have a TSP loan balance of $30,000. How much is the tax if I retire and let the IRS penalize me?

A. The distribution will be taxed as ordinary income for the year in which it is received, but since you’re retiring after age 55, there will be no early withdrawal penalty.


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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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