Alternatives to withdrawals
The following table compares how taking a TSP loan or making an in-service withdrawal would affect your account.
Loan | In-Service Withdrawal | |
---|---|---|
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.
For more information on each program, read TSP Loans and In-Service Withdrawals. These booklets are also available from your agency, service, or through the ThriftLine.