Is it smart to take out a TSP loan?
While the ease and low cost of borrowing from a thrift savings plan can make it an attractive option, there are some downsides to consider.
You won’t earn any interest on the outstanding loan amount, which will affect your long-term retirement savings..
Can you take out your TSP money?
If you are 591/2 or older, you can make withdrawals from your TSP account while you are still employed. This is called an “age-based withdrawal” or “591/2 withdrawal.” You must pay income tax on the taxable portion of your withdrawal unless you transfer or roll it over to an IRA or other eligible employer plan.
Can I take out 2 tsp loans?
There are two types of TSP loans — general purpose and residential. … You can have two loans outstanding at any one time, but only one of each. There is a $50 processing fee per loan, which is deducted from the loan amount. When you take a TSP loan, you are borrowing from yourself.
Can I use my TSP to buy a house?
TSP loans used as home loans can be used to buy or build a primary residence. And that can include a house, condo, mobile home, RV or boat, as long you’re going to live in it most of the time. TSP home loans must be repaid within one to 15 years, depending on the terms of the loan.
When can I withdraw from TSP?
Required Minimum Distributions (RMDs) The Internal Revenue Code (IRC) requires that you receive a portion of your TSP account beginning in the calendar year when you become age 72* and are separated from service.
Can you pay off a TSP loan early?
You can make additional payments or prepay your TSP loan at any time by making a check payable to the TSP and submitting it along with a loan payment coupon (TSP-26). You can get the payoff amount via either the TSP website or the ThriftLine.
How long does it take to withdraw from TSP?
How long does it take to withdraw money from the Thrift Savings Plan (TSP)? It generally takes between 7 and 10 business days to process a TSP withdrawal request once it has been properly completed and submitted.
How many TSP loans can I take out?
Loan eligibility can only have one outstanding general purpose loan and one outstanding residential loan from any one TSP account at a time. must have at least $1,000 of your own contributions and earnings in your account (agency/service contributions and earnings cannot be borrowed).