Re: Information about taking a loan against TSP
Originally Posted by
RCTXAN
It's not what I want to do or have happen, but I need infromation about the pro's & con's of taking a loan out against my TSP account. 21 years in and only 7 more possible. Any help will be greatly appreciated. Thank You.
RCTXAN,
Welcome to the MB. It depends on your unique situation and reason for the loan. If you are using it to go on a vacation I would not do it. If you have a small amount of credit card debt with high interest rate that is killing your budget I would only recommend it if you cut up the credit cards first and make a pledge to yourself not to use credit cards.
Using it to buy a Roth CD at 6% yes, no high risk investments for you with 7 years to go. No individual stock or high risk ETF's. You need to be conservative and pay down debt before you retire.
TSP loan cost $50 and the interest rate is the G fund rate that is paid back to your account. It must me paid off before you separate from your government employment or you will get nailed from the money that you have not paid back. This include penalties and taxes.
Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."
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