Reply to can tsp loans be sort of a back door contribution?

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Reply to "can tsp loans be sort of a back door contribution?"

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[quote=Anonymous]Let's say you current max a tsp.

Would it make sense to take a tsp loan and immediately invest it in a traditional IRA?  The only cost is the $50 fee for a personal loan you don't need to state the purpose of.

The point of doing this is because of you continue to max your tsp, the tsp loan repayments are an additional payment per month that would contribute to your overall retirement savings, which allows you to bypass the max.

Yes, you have to repay the loan with taxed income and could simply invest in an IRA directly, but the difference is that the loan is payed back with interest. And the interst goes back to yourself.  So you are earning more money by taking the loan, investing it, repaying it with interest towards yourself rather than directly investing in an IRA with taxed money, right?

Assume you are in the brack too where you are beyond writing off contributions to an IRA.  You'd have to use taxed money to contribute to an IRA no matter what.

Is there something wrong in the logic here? I can't figure out how'd it's a loss or not worth the effort.[/quote]

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