How to Withdraw From TSP While In-Service: Age-Based and Hardship

If you’re a federal employee or service member who needs to tap your Thrift Savings Plan before you leave federal service, a TSP in-service withdrawal is the mechanism that lets you do it. There are two paths. Once you turn 59½, you can take an age-based withdrawal without explaining why. Before 59½, you can only withdraw for a qualifying financial hardship. Both paths trigger taxes, may trigger an early withdrawal penalty, and permanently reduce your retirement balance.

Age-Based Withdrawals at 59½

After your 59½ birthday, you can request an in-service withdrawal for any reason as long as you’re vested in your account.¹ You can make up to four age-based withdrawals per calendar year from each active account.² Each one must be at least $1,000, unless you’re taking out the rest of your vested balance and what’s left is smaller than that.³

There is no ceiling other than your vested balance itself. You can pull from your traditional balance, your Roth balance, or both. Because you’re already past 59½, the 10% early withdrawal penalty doesn’t apply.

Financial Hardship Withdrawals Before 59½

If you’re under 59½, you can only withdraw in-service if you have a genuine financial hardship that fits one of five categories defined in the regulations.⁴

Negative monthly cash flow, meaning your regular income falls short of your recurring monthly expenses.
Unpaid medical expenses for you, your spouse, or your dependents, including home modifications required because of a medical condition or injury.
Personal casualty loss to repair or replace property damaged by a sudden event such as fire, storm, flood, earthquake, or theft, to the extent it isn’t reimbursed by insurance.
Legal expenses tied to a separation or divorce, such as attorney fees and court costs. Alimony and child support payments themselves don’t qualify.
Losses from a FEMA-declared disaster, if your home or workplace sat inside a designated individual-assistance area at the time.

The minimum hardship withdrawal is $1,000, and you can’t take more than the documented amount of your need.⁴ Any expense already paid or reimbursable by insurance doesn’t count toward that need. Hardship withdrawals are limited to your own contributions and the earnings on them; agency matching contributions and their earnings are off-limits.² If you hold both traditional and Roth money, you can pull from one or both.⁵

Once a hardship withdrawal is disbursed, you have to wait six months before submitting another hardship request.³ You don’t have to upload proof with the request, but the TSP can ask for documentation at any time, so keep your medical bills, repair estimates, eviction notices, and anything else that backs up your claim.⁵

Taxes and Withholding

The two withdrawal types are taxed differently, and the mandatory withholding is different too.

For an age-based withdrawal, the TSP withholds 20% of the taxable portion for federal income tax. You can raise that percentage, but you can’t lower it below 20% unless you roll the money directly into an IRA or another eligible employer plan.² Traditional balance money is taxed as ordinary income in the year you receive it.

For a hardship withdrawal, withholding is 10% of the taxable portion.⁶ The full taxable amount counts as ordinary income for the year. Because you’re under 59½, you may also owe an additional 10% early withdrawal penalty when you file your return. Some exceptions to that penalty exist, including distributions due to total and permanent disability, qualifying military reservist call-ups, and terminal illness.¹ The combined effect matters: between the withholding and the possible penalty, you may net well below the gross amount you request, so plan the request against what will actually land in your account.

Roth Balance

Withdrawals from your Roth balance include both your after-tax contributions and a proportional share of earnings. The contributions themselves come out tax-free at any age. The earnings are only tax-free if two conditions are met: at least five years have passed since January 1 of the year you made your first Roth TSP contribution, and you’ve reached 59½, become permanently disabled, or died.⁷ If those conditions aren’t met, the earnings portion is taxed as ordinary income and may also face the 10% early withdrawal penalty.

Tax-Exempt Combat Zone Contributions

If you’re a uniformed services member who contributed from tax-exempt combat zone pay, your withdrawal includes a proportional share of those tax-exempt contributions, and you won’t owe taxes on that portion. Earnings on those tax-exempt contributions in your traditional balance are still taxable.⁵

Spousal Consent

If you’re married and covered by FERS or the uniformed services retirement system, your spouse must consent to any in-service withdrawal, regardless of the dollar amount. There is no minimum balance or dollar threshold that exempts you.⁸ Your spouse signs the withdrawal request form, and the signature must be notarized.⁹ By signing, your spouse waives the right to a joint and survivor annuity for the amount being withdrawn, and once submitted, that waiver is irrevocable for that withdrawal.

Married CSRS participants face a lighter rule. Your spouse is entitled to notice of the withdrawal but doesn’t have to consent, so you must give the TSP your spouse’s current email or physical address for that notification.⁸ Under either system, an exception can be requested in limited circumstances, such as when the spouse can’t be located.

Submitting the Request

All in-service withdrawal requests go through your My Account portal at tsp.gov. The system walks you through the choices you need to make:

Withdrawal type: age-based or financial hardship.
Dollar amount, with the $1,000 minimum in most cases.
Fund source: traditional, Roth, or both.
Tax withholding, if you want to raise it above the default.
Bank routing and account numbers for direct deposit.

If spousal consent is required, the system generates the form. Your spouse signs it, gets the signature notarized, and you upload it back into the portal. For hardship withdrawals, you select the qualifying category and certify that your need is genuine. Documentation isn’t required at the time of the request, but the TSP can ask for it later. Check your banking details carefully; a wrong number can hold up your funds. Once the TSP has everything it needs, processing generally takes several business days, and payment arrives by direct deposit with a confirmation posted in the portal.

Rolling Over an Age-Based Withdrawal

An age-based in-service withdrawal counts as an eligible rollover distribution, so you can move the funds directly into a traditional IRA, a Roth IRA, or another eligible employer plan instead of taking cash.¹⁰ A direct rollover skips the 20% mandatory withholding that would otherwise come off the top.²

If you roll traditional TSP money into a Roth IRA, you’ll owe income tax on the converted amount in the year of the rollover. Roth TSP money can only be rolled into another Roth account, whether a Roth IRA or a Roth account in an eligible employer plan.¹⁰ Hardship withdrawals are not eligible for rollover.

Consider a TSP Loan First

Before you request a withdrawal, look at whether a TSP loan would do the job. A loan doesn’t permanently shrink your account. You repay it through payroll deductions, and once it’s paid back, the balance is restored and keeps earning returns.¹¹ You also owe no income tax on the borrowed amount.

There are two loan types. A general purpose loan can be used for any reason, with a repayment term of 12 to 60 months and a $50 processing fee. A primary residence loan must go toward buying or building your primary home, with a repayment term of 61 to 180 months and a $100 processing fee.¹² The minimum loan is $1,000, and the maximum is capped at $50,000. The interest rate is fixed for the life of the loan at the G Fund rate from the month before you apply.

A loan works best when you need temporary access to cash and can handle the payroll deductions. One catch: if you separate from federal service before the loan is fully repaid, the outstanding balance may be treated as a taxable distribution.

What It Costs Your Retirement

Every dollar you take out in-service stops compounding. The TSP puts it directly: your retirement savings are permanently reduced by the amount of the withdrawal, and you lose all future earnings those funds would have generated.¹¹ Over a long career, the lost growth can far exceed what you originally took out.

For hardship withdrawals, the six-month wait before you can request another one is worth planning around. If a second emergency hits inside that window, this route won’t be available to you.³ And because a hardship withdrawal comes with 10% withholding plus a possible 10% early withdrawal penalty, request enough gross to leave you with what you actually need after the government takes its cut.

1
Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
2
The Thrift Savings Plan (TSP). In-Service Withdrawal Types and Terms
3
eCFR. 5 CFR Part 1650 – Methods of Withdrawing Funds from the Thrift Savings Plan
4
eCFR. 5 CFR 1650.32 – Financial Hardship Withdrawals
5
Thrift Savings Plan (TSP). Withdrawals In-Service
6
The Thrift Savings Plan (TSP). Financial Hardship
7
TSP. Changes to Tax Rules About TSP Payments
8
eCFR. 5 CFR 1650.62 – Spousal Rights Applicable to In-Service Withdrawals
9
Thrift Savings Plan (TSP). Bulletin 12-3 – Consolidation of Forms TSP-76
10
TSP. Rollovers From the Thrift Savings Plan to Eligible Retirement Plans
11
The Thrift Savings Plan (TSP). Alternatives to Withdrawals
12
The Thrift Savings Plan (TSP). TSP Loans