tsp loan question

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MrSnrub
Posts: 106
Joined: Sun Jun 26, 2016 8:21 am

tsp loan question

Post by MrSnrub »

I took out a tsp residential loan a couple years ago and I still have about $25000 yet to pay. If I quit my job and find another one in the private sector, then I have 90 days to pay the $25000 in full. Is this correct?
Nobody knows what the market is going to do in the future. Stop asking. Just shut up and follow strategy #72033 to glory.

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onerepmax
Posts: 138
Joined: Tue Aug 08, 2017 9:29 am

Re: tsp loan question

Post by onerepmax »

Not sure about residential, but I had a general loan balance when I retired from active duty. There was some time to pay it off before the balance (or full loan amount?) was taxed (and penalized?) It's been 11 years, so it's all a little fuzzy.

RDub
Posts: 10
Joined: Fri Jun 10, 2016 9:41 am

Re: tsp loan question

Post by RDub »

The following is from page 20 of the "Summary of the Thrift Savings Plan" which can be viewed at www.tsp.gov "Consequences of failing to repay your loan. If you fail
to repay your loan in accordance with your Loan Agreement
(or your most recent reamortization), or you do
not repay your loan when you separate from service, the
TSP will report a taxable distribution to the IRS. You
will owe income taxes on the taxable amount of the
outstanding balance of the loan and possibly an early
withdrawal penalty tax."

If you can not find the exact answer you are looking for, give the TSP people a call at 1-877-968-3778

Good luck!
Moved from GClapper's M3 Mix to the Daily Seasonal #7980 / July 2017

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: tsp loan question

Post by evilanne »

Yes, you have 90 day period to repay loan before it becomes a taxable distribution. See "Leaving Federal Service" https://www.tsp.gov/PlanParticipation/L ... ralService

buck
Posts: 15
Joined: Wed Jun 23, 2010 11:36 am

Re: tsp loan question

Post by buck »

Also; "Until the loan is closed, you will not be able to make a withdrawal". This is probably more important for those that are retiring and wanting to withdraw their TSP funds via a single payment, series of monthly payments, or a life annuity.

Vesper
Posts: 10
Joined: Tue Feb 28, 2017 9:30 pm

Re: tsp loan question

Post by Vesper »

Good info, thanks.

MrSnrub
Posts: 106
Joined: Sun Jun 26, 2016 8:21 am

Re: tsp loan question

Post by MrSnrub »

Well that sucks. Guess I shouldn't apply for that awesome job, then.
Nobody knows what the market is going to do in the future. Stop asking. Just shut up and follow strategy #72033 to glory.

Miketurk
Posts: 9
Joined: Fri Mar 25, 2016 8:11 pm

Re: tsp loan question

Post by Miketurk »

Just ask the hiring manager for a $25k starting bonus.

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: tsp loan question

Post by evilanne »

You should apply!
I like Miketurk's suggestion & just don't quit until you actually have that awesome job with a confirmed start date.

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