This is a really common question and one that concerns a lot of federal employees, especially those in difficult financial situations. Any outstanding balance you have from a TSP loan must be paid off within 90 days of your separation. If you don’t pay it back, the TSP will treat the money that isn’t repaid as a distribution, and you will have to pay taxes on it.
If you have questions about the TSP and your options, we suggest reaching out to a financial advisor that has experience helping federal employees.
