WyomingLife
Recycles dryer sheets
To me that is a sensible use of the TSP G Fund. But you may not have thought through how to access that "cash" in a tax efficient manner. If we spiral into a massive recession in the next few years you might well figure on pulling "cash" from the G Fund. That will work, but since that cash is coming from a tax deferred source all of it will be taxed as ordinary income. That may or may not matter, depending on your other sources of income that year and whether you have to take RMDs anyway. If you are high income, have a lot of equities in a taxable account, and would rather have your "cash" withdrawal taxed at capital gains rates, you can sort of achieve that by selling enough taxable equities to generate the cash you need and simultaneously buying the same amount of equities through an exchange from G to C in the TSP on the same day. This leaves you with cash on hand and no net change in your equities.
I am indebted to you; again, thank you. Great stuff.