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Wow, thanks for the quick responses! :)

@JAFO: yes, what I've been reading also states the same - which is to avoid as much as possible taking any money out of retirement accounts. It's just too bad because part of the debt is credit card related, hence with high interest.

Just for background, the debt is not something that's been around for a while, it's just from this year. The State Department apparently has good benefits (in terms of housing, schooling support, etc), but not too much on salaries (at least in my mother's position). They've recently been relocated to another country and my parents needed to take out a loan for a car (used!) and that's where part of that debt came from. The other half of the debt is from housing costs in between moves..

In any case, I will advise them not to pull any money out of retirement savings (whatever is left of it!)

Out of curiosity, why would there be alot of people around TMF familiar with the TSP?

@Hohum: I've just gone out and printed out the details of those funds. From what I've been reading (bought several books on investment recently and have been griiiinding through them), for people in my parents age bracket (late 50's), they would do better to avoid stock/equity funds and go for bonds and any other "safer" areas. (does that sound right?)
Once I finish reading about the different funds in the TSP, I'll hopefully be better able to offer more informed advice as to which fund my parents should switch to..

Thank you all, and as always, if there's any other advice or tips, I'd be grateful to hear them.

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