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 Post subject: Advice Needed
 Post Posted: Mon Jul 17, 2017 5:07 pm 
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Joined: Jan 27, 2012
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Hello Community,

Looking for some good financial advice from some of you more "seasoned" and financially savvy folks out there.

A coworker friend of mine had a string of bad luck over the past several months and took some big financial hits. First she exhausted her bank savings account, and then had to end up maxing out her credit card to 20 K. However, she's always been good about funding her traditional TSP account, contributing the max amount each year, and she now has a nice balance of 300 K. She is a GS-11, and plans to retire in 3 years when she reaches her MRA. So she asked me if borrowing from her TSP account to pay off her 20 K credit card debt would be a good idea since the interest rate is 13%, and the high balance is really haunting her. I advised her that borrowing from her TSP is never a good idea, and that I wouldn't recommend it if at all possible. I suggested instead that she lower her TSP contributions to only 5%, and take the extra money to apply toward her credit card each month until it's paid off, or way down at least. She's anxious to get out from underneath the credit card debt in a hurry, and doesn't like the idea of lowering her TSP contributions. But I say she'd be hurting herself even more in the long run by taking out the TSP loan. Who's right?

I'd like to get some other opinions on this matter. I think I'm right and would like some more ammo to support my plan, but welcome any advice. Appreciate you taking time to respond.

J


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AGG (F Fund)
iShares Lehman Aggregate Bond (AGG)

S&P 500 (C Fund)
S&P 500 INDEX,RTH (^GSPC)

DWCPF (S Fund)
Dow Jones U.S. Completion Total Stock Market Index (^DWCPF)

EFA (I Fund)
iShares MSCI EAFE Index (EFA)