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TSP

Administered by the Federal Retirement Thrift Investment Board, this defined contribution plan for federal employees has roughly 4,614,874 participants, and over $358 billion in assets under management. Ask your TSP questions and post related topics here.

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Luisfc1972  
#1 Posted : Sunday, June 6, 2021 4:46:03 PM(UTC)

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i would like to pay off a high interest credit card.
currently 1.5% if i take out a tsp loan.

i understand when i retire my tsp funds will be taxed,
but if i take out a loan now to pay off said credit card, will that money be taxed?

i dont want to pay taxes twice on this money.
FS0201  
#2 Posted : Sunday, June 6, 2021 6:49:59 PM(UTC)
FS0201

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Originally Posted by: Luisfc1972 Go to Quoted Post
i would like to pay off a high interest credit card.
currently 1.5% if i take out a tsp loan.

i understand when i retire my tsp funds will be taxed,
but if i take out a loan now to pay off said credit card, will that money be taxed?

i dont want to pay taxes twice on this money.


Not clear on your question, but you aren’t taxed on TSP loans. Pay it back at whatever interest is charged prior to retiring; you will then be taxed appropriately on the actual withdrawals of your TSP in retirement.
The excuse of, "I read it on FederalSoup..." won't work. Please do your due diligence.
roger.d  
#3 Posted : Friday, June 11, 2021 5:00:21 PM(UTC)
roger.d

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As FS0201 said, you are not taxed when you take out a loan. Unless you leave federal service. Then you need to pay the loan back in full, or be taxed on the remaining balance of the loan.

https://www.tsp.gov/loan...sics/repaying-your-loan/
Socialist governments traditionally do make a financial mess. They always run out of other people’s money. --Margaret Thatcher
roger.d  
#4 Posted : Saturday, June 12, 2021 6:34:37 PM(UTC)
roger.d

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As one radio financial coach would say, it is unlikely that the interest rates on your CC are the issue. Roll up your sleeve and toss every dime you have at the lowest balance bill while paying the minimum on the rest. When that bill is paid off, take all of that payment and put it to the next lowest balance bill.

No eating out. No vacations. No ribeye and lobster tail.

Drop your TSP contribution to 5%, or even all together for the 12-18 months it will take to pay them off.
Socialist governments traditionally do make a financial mess. They always run out of other people’s money. --Margaret Thatcher
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