With so much uncertainty regarding both the economy and personal finances at this time, you might wonder if you should take advantage of the opportunity to access funds in your Thrift Savings Account.
You can take a hardship withdrawal or loan from your TSP. Many of us are facing challenges at this time, either due to interrupted income, sudden child care expenses due to school closures, or both.
The CARES Act provides increased flexibility regarding early withdrawals and loans from retirement accounts such as the TSP. The new provisions allow for those under age 59 ½ to withdraw up to $100,000 from their retirement account, due to financial hardship. The normal 10 percent penalty for early withdrawals will be waived. Then, you could opt to repay the money within three years or the money would become taxable.
If at all possible, research tapping a savings account or other source of funds before dipping into your TSP. Call your mortgage lender and other debtors to inquire about deferrals on payments, and examine your budget to identify ways you can reduce expenses at this time.
For more ideas on how to adjust your financial planning to account for any difficulties you might be facing, give us a call and we’ll be available to review your options.