I have mixed feelings about TSP loans.
For some they can be a savings grace in a bind but they are often misused.
We all know that unexpected things happen in life and ideally none of us would ever have to touch our retirement savings to cover these emergencies.
But because life is often not ideal, there are certain times that a TSP loan might just be the best option even with the negative consequences.
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Dallen Haws at Haws Financial Planning
Sierra Vista, AZ
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I am a practicing financial planner, but I’m not your financial planner. Don’t take what I say as specific advice for your situation. Please consult with your own tax, legal and financial advisors.
Dallen Haws at Haws Financial Planning
Sierra Vista, AZ…(read more)
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i ve got $37k left on my home mortgage to pay … what are the terms of the TSP? How much can i borrow and at what interest rate , and for how many years will they allow me to pay it back ????
I have 5 years left to pay to the bank at 5.5 % on the mortgage
I have about $70k in my TSP
I did it to contribute to college interest rate lower.
how about when the market is in a downturn and my money is just sitting there in the G fund…..
If I owe 40k on my house . Can I take out a loan to pay it off ?
Me: can I take a TSP loan to hold me over while waiting for OPM to process my retirement pay?
TSP rep: yes but you have to pay it back in 90 days from retirement date or it will be treated as a withdrawal.
OPM: currently the processing time for retirement pay is 94 days.
Wouldn’t it make sense to also use the TSP as a down payment on your home, where you’re just investing your own money into your own real estate, and then instead of paying the loan back to a bank you’re paying the loan with interest back to yourself?
Also, right before a recession to key individual stocks.
1:37 to skip a clock ramble.
It’s a huge OPPORTUNITY COST!
The true cost is the money in your TSP is there pre tax, and your loan payments are made with after tax money, into an account where you will be taxed again.
Fourth time when it may make sense to take a TSP loan — down payment on your forever home.
Dallen, I'm jumping on Amazon and sending you a tickless clock today! Love the videos buddy….
I don't know how true it is, but I heard from co workers that if you take out a hardship withdraw you cannot contribute to your tsp for six months. If that is the case, that's another reason to take a loan instead of a hardship withdraw.
Do loans have to be paid back before retirement?
love that clock