TSP loan or taxable brokerage account withdrawal?

[Anonymous]

I need to scrape together $50k and I don’t have that much in my savings. I have a TSP account and a taxable brokerage account and I’m debating the pros and cons of where to take the money from. TSP loans are currently 4.25%. My brokerage account is suffering from the market and I may be able to take advantage of some losses. Thoughts?

[Anonymous]

I would probably do the loan but if you think your TSP will do better than 4.25% over the period of time it will take you to pay off the loan then you could do cash up to the amount of your losses and then TSP.

[Anonymous]

The 4.25% of the TSP loan you are paying to yourself. The costs of a TSP loan are: the opportunity cost of that money not being in the market and the fact that you are putting in that 4.25% of after tax money in, which will be again taxed when you withdraw.

[Anonymous]

I’m confused. Under what scenario would someone suddenly need $50k cash? I can’t think of any.

[Anonymous]

Anonymous wrote:I’m confused. Under what scenario would someone suddenly need $50k cash? I can’t think of any.

To pay off Stormy Daniels. Satisfied?

[Anonymous]

Anonymous wrote:I’m confused. Under what scenario would someone suddenly need $50k cash? I can’t think of any.

Medical expenses can hit this easily. Many things are not covered like dental and certain types of in patient facilities like rehabs, and you have to come up with the cash upfront.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m confused. Under what scenario would someone suddenly need $50k cash? I can’t think of any.

Medical expenses can hit this easily. Many things are not covered like dental and certain types of in patient facilities like rehabs, and you have to come up with the cash upfront.

Lack of emergency fund when life happens.

[Anonymous]

Taxable brokerage account

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m confused. Under what scenario would someone suddenly need $50k cash? I can’t think of any.

Medical expenses can hit this easily. Many things are not covered like dental and certain types of in patient facilities like rehabs, and you have to come up with the cash upfront.

Only if totally uninsured. I have a really crappy plan HDHP and my out of network OOP max is still $20k. $50k is a lot of money to be “unexpected” and also not be eligible for a loan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m confused. Under what scenario would someone suddenly need $50k cash? I can’t think of any.

Medical expenses can hit this easily. Many things are not covered like dental and certain types of in patient facilities like rehabs, and you have to come up with the cash upfront.

Only if totally uninsured. I have a really crappy plan HDHP and my out of network OOP max is still $20k. $50k is a lot of money to be “unexpected” and also not be eligible for a loan.

Ha! We carry two PPO insurances, plus two dental insurance plans. Had to pay $60,000 up front for extensive dental work an older child with gastroparesis needed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m confused. Under what scenario would someone suddenly need $50k cash? I can’t think of any.

Medical expenses can hit this easily. Many things are not covered like dental and certain types of in patient facilities like rehabs, and you have to come up with the cash upfront.

Only if totally uninsured. I have a really crappy plan HDHP and my out of network OOP max is still $20k. $50k is a lot of money to be “unexpected” and also not be eligible for a loan.

Ha! We carry two PPO insurances, plus two dental insurance plans. Had to pay $60,000 up front for extensive dental work an older child with gastroparesis needed.

WTF? Your kids have shark teeth?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m confused. Under what scenario would someone suddenly need $50k cash? I can’t think of any.

Medical expenses can hit this easily. Many things are not covered like dental and certain types of in patient facilities like rehabs, and you have to come up with the cash upfront.

Only if totally uninsured. I have a really crappy plan HDHP and my out of network OOP max is still $20k. $50k is a lot of money to be “unexpected” and also not be eligible for a loan.

Had to front $25k so a family member could go to rehab. It’s not as easy to find an in-network provider for dual diagnosis on a couple of days’ notice as you seem to think Insurance reimbursed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m confused. Under what scenario would someone suddenly need $50k cash? I can’t think of any.

Medical expenses can hit this easily. Many things are not covered like dental and certain types of in patient facilities like rehabs, and you have to come up with the cash upfront.

Only if totally uninsured. I have a really crappy plan HDHP and my out of network OOP max is still $20k. $50k is a lot of money to be “unexpected” and also not be eligible for a loan.

Had to front $25k so a family member could go to rehab. It’s not as easy to find an in-network provider for dual diagnosis on a couple of days’ notice as you seem to think Insurance reimbursed.

And: the insurance was excellent. It doesn’t matter how good the insurance is if providers don’t participate in it.

[Anonymous]

We did a TSP loan in July to help fund our house purchase as "Cash". It saved us tens of thousands over a mortgage and loan origination fees. However, the S&P was much higher than it is currently, and the rate was lower... 3.875? So it was more of a no brainer for us at the time.

If you need this money and have no other money to use in case ANOTHER emergency strikes, then I would suggest the TSP route.

[Anonymous]

Anonymous wrote:We did a TSP loan in July to help fund our house purchase as "Cash". It saved us tens of thousands over a mortgage and loan origination fees. However, the S&P was much higher than it is currently, and the rate was lower... 3.875? So it was more of a no brainer for us at the time.

If you need this money and have no other money to use in case ANOTHER emergency strikes, then I would suggest the TSP route.

You got lucky. Market was high in July.