By Mike Miles
April 21st, 2011 | Uncategorized
Q: I am a 54-year-old FERS employee who will be forced to retire soon. My 6.2 percent mortgage will eat up over half my pension. Would it make sense, upon retirement, to withdraw enough from my TSP to payoff the mortgage and leave the remaining funds? I will need 65,000 and have about 170,000 in my TSP.
A: Whether it’s a good idea or not will depend upon how the move fits into your overall retirement strategy. Without a clearly defined strategy for managing your resources through retirement, it is impossible to say whether the move will help or hurt. In my experience — where I’m the one responsible for formulating and managing the retirement plan — it’s usually not the recommended tactic, since it tends to impair liquidity and ability to fund cash flows in retirement.
Scott McLennan Says:
April 22nd, 2011 at 10:05 am
You could refinance at a lower rate to reduce your payments.