Recently, Michael Kitces published an article titled, “Why Paying Yourself 5% Interest On A 401(k) Loan Is A Bad Investment.” My first thought was, “If it’s a bad idea for a 401(k) loan, it must be even worse for Thrift Savings Plan loans.” After all, the interest on a TSP loan is nowhere near 5%…it’s tied to the G-Fund interest rate. At the time of this writing, that would be 2.25%. In other words, that’s less than than half of the 401(k) loan mentioned in Kitces’ article.
But that’s not why I wrote this article. After all, I …Read More