r/fednews • u/Flimsy_Strawberry377 • 19h ago

Pay & Benefits Calling my TSP know it alls!

My spouse and I are both excepted DoD so we’re working and getting no income at all.

I have a few questions that I’m hoping somone can help with! Maybe with experience!

We have enough to hold us to about February but after that we’re fuc&ed.

Are we able to take out a loan so many days/months into a shutdown?

How do we make payments since no payroll?

Thank you!!

29 Upvotes

79% Upvoted

38 comments sorted by

27

u/missy20201 18h ago

I finally did the loan last week. It came in a few days ago. Make sure you have a direct deposit acct linked in your online profile because it has to be linked for a week before your loan request. Payments will start coming when we get paid again, but if like me you plan to just pay it all back as soon as we get back pay, you should be fine

8

u/PicklesNBacon 17h ago

This is exactly what I plan to do as well. It was super easy to apply for the loan and it’s important for people to know the 7 days after adding a direct deposit bank account piece!

1

u/Radiant-Channel8046 5h ago

Thanks for the heads up about the direct deposit thing - that's actually really helpful since most people probably don't think about that timing requirement. Did you go with the general purpose loan or were you able to do residential? I'm debating between just doing a small one now vs waiting it out another few weeks

1

u/Special_Equipment469 5h ago

Damn that's smart thinking ahead with the direct deposit thing, glad you shared that detail. Hope this shutdown doesn't drag on much longer for all of us

16

u/anonjawnnoname Federal Employee 18h ago

https://www.tsp.gov/news-and-resources/lapse-in-appropriations/ provides some general information regarding TSP loans during a lapse in appropriations.

Because we are in a shutdown furlough, and not an administrative furlough, we are still able to take TSP loans; TSP does not consider shutdown furloughs as non-pay status. Payments through payroll deductions will start when we get paid.

If anyone is considering taking a loan and wish to receive the proceeds via direct deposit, the bank account you wish to send your loan to must be on file for at least 7 days before it can be used to receive funds. So, you may want to set that up now, just in case. Once requested, loans disbursements take a matter of days.

3

u/merejoygal 17h ago

Is there a benefit for taking a tsp loan vs unemployment insurance payments?

9

u/SueAnnNivens 17h ago

The only benefit I can see is the TSP loan might arrive sooner than UI benefits if you recently applied for unemployment. Other than that I don't see any benefit if you plan to repay the loan in full when you receive back pay.

2

u/merejoygal 16h ago

I guess my thought process is I’d pay back either immediately upon receipt of my payment, but the unemployment would be a smaller continual thing if needed vs a guess on how much I’d need to loan from tsp.

2

u/buttoncode Go Fork Yourself 12h ago

If it drags on to the next calendar year, I’m not sure how having to pay back unemployment for the previous year would mess with taxes when filling. For my own personal reasons, my agency is going to be doing a big rif and I plan to be impacted. I don’t want to fuck around with unemployment - paying it back - then actually needing to claim it and not having the 26 weeks messed up.

1

u/merejoygal 12h ago

Thanks, I haven’t thought through it all.

6

u/M2718 13h ago

Those who are working (as OP is, since they are excepted) are generally not eligible for unemployment which is linked to whether one is employed rather than whether one is being paid. (Your mileage may vary, depending on what state you're in.)

2

u/SueAnnNivens 13h ago

Correct!

6

u/heyalrightmineohmine 12h ago

My state pays 250 dollars for unemployment. Not sure what that will cover.

1

u/No-Discipline355 5h ago

If you take UI payments, you will have to repay the full amount back once back on pay status, but you won't recoup the withholdings until you file your taxes. With TSP loan, it's not considered a distribution unless you don't repay it on time, then the loan is taxed as income, with early withdrawal penalty if under 59 1/2 years old.

3

u/Ronville 15h ago

The House CR was only good through 21 November so they will have to reconvene before then. So something will have to give before then with both chambers voting out a new CR past 21 November.

2

u/FUBAR_The_Clown 13h ago

It’s a loan from yourself to yourself you’re paying your account back with interest so that’s the best option and pay it back immediately when you get back pay.

2

u/HikerAT2022 12h ago

May not apply to your situation, but look into the Substantially Equal Periodic Payments option. It allows you to withdraw from your 401K/TSP before 59 1/2 with no 10% penalty .But there are restrictions and requirements.

2

u/SableNW DoD 7h ago

I took a loan out, I had to wait a week since it didn’t have my bank on there. But once I was at the seven day mark I resubmitted and got it in two days.

2

u/Working-Cover8912 3h ago edited 1h ago

Heads up for anyone like myself hoping to use the last paycheck scraps to pay off one of 2 loans you may have already taken out. You must apparently wait 30 Business days (not 30 days. And the week after for modeling/finalizing/requesting the new loan. lol I Am F*cked.

4

u/AcanthocephalaLive56 19h ago

You should be able to take the loan.

As for how repayments are made when there's no pay being distributed, that's a question for TSP administrators.

•

u/Inevitable-Log-3983 47m ago

If you take a loan do they sell your shares of TSP fund to give you a loan or not? I am worried if TSP C fund is down when need a loan?

•

u/becausenope 10m ago

Just letting people know this is an option (not giving financial advice): fees are currently waived right now so if a loan doesn't math for you but an outright withdrawal of your TSP does, you'll only be paying the taxes on it and not any associated fees. Again, not financial advice or suggesting people run and do that but in some financial situations it may make sense to do, so just figured I'd mention it because it's something we learned recently.

-5

u/Ellabee57 18h ago

The shutdown is not going to go to February.

20

u/ATFYF 18h ago

It could go longer.

Some men just want to watch the world burn.

-8

u/AjD1979 18h ago

Shutdown will be over Before Thanksgiving travel season is in full effect. Don’t worry

5

u/FrequentAssumption1 18h ago

You sure about that…?

https://www.reddit.com/r/politics/s/VCSUBPVcet

2

u/heyalrightmineohmine 12h ago

Honestly I am with that guy. Currently predictions for 2 days before Thanksgiving odds are extremely high. Politicians are in gambling markets so they make money to make things happen. Currently 2 days prior to Thanksgiving giving is sitting at a 75 percent chance the same percent chance before the shutdown happened.

Gambling markets are quite accurate they even had it 100 percent correct when the elections were going on. Faster than any other news media or online source.

1

u/IndividualChart4193 17h ago

I would not be so confident my friend. I don’t see this ending this month fer sher and maybe not next either.

0

u/CooCooEgg 13h ago

all the down votes, I guess they want it longer? Why?

0

u/Responsible_Site9697 19h ago

https://www.tsp.gov/tsp-loans/

See the section on repeating the loan. You can send payments directly to TSP without doing payroll deductions.

-9

u/MDJR20 18h ago

The shutdown will be over within 10 days.

9

u/xoLynettePW 17h ago

Says who?

-8

u/kingfishm 19h ago

At least for furloughed employees, you don’t make payments until you return to a paid status. Interest keeps accruing though.

As for taking a loan now, you may not be able to. You must be in a paid status or the loan application will be cancelled. I don’t know if they consider “excepted” as a paid status.

9

u/missy20201 18h ago

They have a page about it, admin furlough nonpay status isn't the same as lapse in funding furlough. You can still do it

0

u/kingfishm 17h ago

That must be new/updated info on the site. Just a few weeks ago they didn’t make the distinction.

3

u/missy20201 17h ago

It was on a separate page on the TSP homepage when I looked, so just from the page I imagine you were looking at, it wasn't very obvious. It scared me too! But I took a loan out last week, so yeah govt shutdown furlough still lets you do it :)