TSP Loan Question

[Wrathchild]

I am in the process of tranferring about 20k from my previous Employer 401K plan into my TSP.

Can I take out a TSP loan to include the funds that have been transferred or rolled into the TSP?

I can't find any info on this specific aspect in the TSP Loan Handbook or anywhere else for that matter.

Thanks

 

[pokerstar629]

I am in the process of tranferring about 20k from my previous Employer 401K plan into my TSP.

Can I take out a TSP loan to include the funds that have been transferred or rolled into the TSP?

I can't find any info on this specific aspect in the TSP Loan Handbook or anywhere else for that matter.

Thanks

I don't see why not, it's your money. I've taken a couple loans out from TSP in the past. From what I understood, you can withdrawal up to half your account balance not going over the 50k limit assuming you are under the age of 59.5.

Personal loans must be paid back in 5 years or less. You can take up to 15 years for a real estate loan. Hope this helps!

 

[Frixxxx]

I am in the process of tranferring about 20k from my previous Employer 401K plan into my TSP.

Can I take out a TSP loan to include the funds that have been transferred or rolled into the TSP?

I can't find any info on this specific aspect in the TSP Loan Handbook or anywhere else for that matter.

Thanks

https://www.tsp.gov/planparticipation/loans/loanBasics.shtml#BorrowingLimits

If you transfer fully vested, qualified funds, then you can take a loan against it. TSP doesn't view the money differently. But remember, if you take a loan, it is paid back with taxed dollars and taxed again upon withdrawal!

Good Luck!

 

[Wrathchild]

Thanks for the info guys.

 

[Sensei]

I don't see why not, it's your money. I've taken a couple loans out from TSP in the past. From what I understood, you can withdrawal up to half your account balance not going over the 50k limit assuming you are under the age of 59.5.

Personal loans must be paid back in 5 years or less. You can take up to 15 years for a real estate loan. Hope this helps!

When you take out a loan, does the balance of your TSP account go down, thereby reducing the amount you can earn in returns? Like if I have $20K in the account, and take out a loan of $10K, will only the remaining $10K be invested in my allocated fund? Or does TSP leave all $20K in there while I'm paying them back?

 

[Kaufmanrider]

When you take out a loan, does the balance of your TSP account go down, thereby reducing the amount you can earn in returns? Like if I have $20K in the account, and take out a loan of $10K, will only the remaining $10K be invested in my allocated fund? Or does TSP leave all $20K in there while I'm paying them back?

Your balance goes down. Your bi-weekly payments toward your loan will show up on your TSP account along with/like your bi-weekly contributions, i.e., adding to your TSP account.

Also, if you log into your TSP account, there is a page that will tell you how much of the TSP money is available to you for a loan. I believe any matching contributions from the Feds are not included
in the amount, only your contributions, at I believe 50% or so. I am sure they have some complicated forumla.

 

[Sensei]

Your balance goes down. Your bi-weekly payments toward your loan will show up on your TSP account along with/like your bi-weekly contributions, i.e., adding to your TSP account.

Also, if you log into your TSP account, there is a page that will tell you how much of the TSP money is available to you for a loan. I believe any matching contributions from the Feds are not included
in the amount, only your contributions, at I believe 50% or so. I am sure they have some complicated forumla.

Thanks. I'm trying to decide if I should buy extra years toward retirement in my CalSTRS (California teachers) account. I'll have to look into what it would cost, and what the eventual return would be to see if it is worthwhile. I'd probably borrow from the TSP in order to do it. I should have done it this year, since I was just losing money anyway.:suspicious:

 

[Frixxxx]

....Also, if you log into your TSP account, there is a page that will tell you how much of the TSP money is available to you for a loan. I believe any matching contributions from the Feds are not included
in the amount, only your contributions, at I believe 50% or so. I am sure they have some complicated forumla.

Good point
https://www.tsp.gov/planparticipation/eligibility/typesOfContributions.shtml

From this site:

[h=4]A Few Words About Vesting[/h]Agency Automatic (1%) Contributions are subject to vesting rules. You are vested in (entitled to keep) all of your Agency Automatic (1%) Contributions, as well as any earnings that they accrue, after a certain period of Federal service.
Most FERS employees become vested after having completed 3 years of service. For those in Congressional and certain other noncareer positions, the service requirement is 2 years. All Federal civilian service counts towards vesting.
If you leave Government service before satisfying the vesting requirement, the Agency Automatic (1%) Contributions and their earnings will be forfeited to the TSP. If you die before separating from service, you are automatically considered vested in all the money in your account.