If an outstanding TSP loan going into retirement isn’t repaid, is it my 1-time partial withdrawal?


We’re allowed a one time partial withdrawal from TSP in retirement, would not repaying my loan, which becomes a taxable distribution, qualify as my one time partial withdrawal from TSP?

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Posted by (Questions: 1, Answers: 0)
Asked on March 9, 2017 7:28 pm
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This is an unusual question and I could not find a clear answer on the TSP website or elsewhere. Therefore, please consider this response to be an “educated guess”.
In several places the TSP specifically states that you cannot make a post-separation withdrawal of any kind until your loan is closed. Based on this, it would seem that closing your loan (either by paying it or taking a taxable distribution) would not be considered a withdrawal and you would still have the opportunity after separation to take both a partial and a full withdrawal.
Have any readers run into this situation? If so, can you respond?

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Answered on March 10, 2017 12:05 pm
<p>I was curious about that as well since I&#8217;m hoping to retire next year but will still have an outstanding loan balance.</p>
( at March 15, 2017 12:32 am)
Private answer

I will also have an outstanding TSP loan when I separate from federal service and I was told by the TSP rep that the loan would NOT count as the one-time partial withdrawal.

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Answered on March 25, 2017 4:30 pm