What Happens To My TSP Loan If I Quit?

Can I use my TSP to pay off debt?

Using a Thrift Savings Plan (TSP) loan to pay off your credit card debt is a pretty straightforward process.

In addition, you are double-taxed on the interest – you repay the loan with after-tax dollars, and the funds are taxed again when you withdraw..

Do you have to pay back TSP loan?

If you meet the loan eligibility rules and your loan request is approved, the loan amount is removed from your TSP account. You must repay your loan with interest. Generally, loans are repaid through payroll deductions. Your repayments restore the amount of your loan, plus interest, to your account.

Does a TSP loan affect your credit?

The TSP loan does not appear on credit reports as a loan, and because it is your money you do not have to report it as a loan on your mortgage application (you can’t borrow money from yourself, after all). If you are required to provide the source of funds, these funds are from your retirement savings.

How long do you have to pay back a TSP loan?

one to 15 yearsTSP home loans must be repaid within one to 15 years, depending on the terms of the loan. If you apply for a TSP residential loan, you have to submit documentation that you or your spouse is buying or building the home.

How many TSP millionaires are there?

45,200 TSP millionairesCurrently there are just above 45,200 TSP millionaires—out of some 5.8 million accounts, including current and retired federal and military personnel and survivors—up by 18,000 from the end of March but not yet back to the 49,600 at year-end 2019.

Will my TSP continue to grow after I retire?

You can leave the money in your Thrift Savings Plan account until April 1st of the year after you turn 70 ½. … Pros – Your money can continue to be invested and may grow in value over time. Cons – You are limited in your investment choices – you can only invest in the specific funds in the TSP.

Can I use my TSP to pay off my mortgage?

Generally, it’s not a good idea to withdraw from a TSP or an IRA to pay off a mortgage. If you withdraw before you turn 59½, you may incur taxes and early-payment penalties.

How much of my TSP can I borrow?

To borrow from your TSP account, you must be a Federal employee in pay status. If you qualify for a TSP loan, the maximum amount you may be eligible to borrow is $50,000; the minimum amount is $1,000. To find out the amount you have available to borrow, visit TSP Loans in the My Account section.

What happens to my TSP if I quit?

If you do not begin withdrawing your account as required, your account balance will be forfeited to the TSP. … This will be paid to you until your entire account balance has been paid out of your account. You can also withdraw your TSP account as a life annuity.

Is TSP better than 401k?

The TSP offers both a traditional option and a Roth option, as do many 401k and 403b plans. Contributions to the traditional option are taxed deferred and reduce your taxable salary, but any future withdrawals are treated as taxable income. … Limits on TSP contributions are equivalent to those for 401(k) plans.

At what age can I withdraw from TSP?

59Age based withdrawals are available to employees who are age 59 ½ or older. Up to four age-based withdrawals can be taken per year, and the amount that can be taken in an age-based withdrawal is limited only by the employee’s vested account balance.

What is the average TSP balance at retirement?

Re: Average TSP Balance at Retirement 30, the average account balance of an employee covered by the Federal Employees Retirement System was $56,494.