Alternatives to withdrawals
The following table compares how taking a TSP loan or making an in-service withdrawal would affect your account.
|Cost to Participant||
|Effect on Taxes||
None (unless loan is not paid back and we report a taxable distribution*)
|Effect on Earnings||No earnings on amount of loan until funds are repaid||
*When we report a taxable distribution, the Internal Revenue Service (IRS) considers the unpaid balance (including any accrued interest) of the loan to be taxable income.