TSP Loan Calculator: Should You Borrow from Your TSP?
Many federal and postal employees consider taking out a loan from their Thrift Savings Plan (TSP) account to perhaps use as a down payment on a new home, to remodel their current home, to pay off high interest debt, or to use in a financial emergency.
But is a TSP loan a good idea?
What will it cost you in the long run? Will it jeopardize your future retirement income? And, if so, by how much?
In response to many requests on this topic from My Federal Retirement readers, below are some helpful articles and a link to the TSP loan calculator that will assist you in making a decision.
- Types of TSP loans available to you
- 6 key rules for borrowing from your TSP
- Other considerations provided by the TSP
The TSP Loan Calculator on the Thrift Savings Plan website estimates loan payments based on the amount you want to borrow from your TSP account, the current loan interest rate, and other factors. 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 access the TSP Loan Calculator, go to: https://www.tsp.gov/planningtools/loan/loan.shtml
BankRate.com has provided a free online calculator that can assist you in finding out how much money (in terms of growth in your retirement savings) you'll potentially lose while you are paying off a loan from your TSP. (Note: while this calculator is for a "401k loan", keep in mind that a 401k savings plan in the private sector is very similar to the government's Thrift Savings Plan for federal and postal employees.)
Go here to use Bankrate's calculator: http://www.bankrate.com/elink/calc/401kl.asp
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