TSP withdrawal rules let you take multiple partial payouts, run flexible installment payments, and pick whether the money comes from your Traditional or Roth balance, subject to age limits, tax withholding, spousal consent, and — if you are under 59½ — a 10% early withdrawal penalty unless an exception applies. What follows is how each of those pieces works in practice.
How Often You Can Withdraw and the Minimum Amount
If you are still employed and have reached age 59½, you can take up to four in-service withdrawals per calendar year from the account tied to your current federal job.1Thrift Savings Plan (TSP). In-Service Withdrawal Types and Terms Each one must be at least $1,000, or your full vested balance if it is smaller.2Thrift Savings Plan (TSP). Withdrawals In-Service Taking an age-59½ withdrawal does not affect your ability to take partial withdrawals after you eventually separate.3Thrift Savings Plan (TSP). TSP Withdrawal Options Bill Becomes Law
After you leave federal service, there is no annual cap on partial withdrawals. The 30-day waiting period between withdrawal requests was eliminated in May 2024, so you can submit back-to-back requests.4Thrift Savings Plan (TSP). No 30-Day Waiting Period Between Withdrawal Requests The $1,000 minimum still applies. One small trap: if your balance falls under $200 at separation, the TSP automatically mails you a check for what is left and closes the account.5Thrift Savings Plan (TSP). Summary of the Thrift Savings Plan
Installment Payments
For steady retirement income, you can set installment payments on a monthly, quarterly, or annual schedule. Choose either a fixed dollar amount or an amount calculated from IRS life-expectancy tables. You can stop, restart, or adjust the payments at any time through your online account.6Thrift Savings Plan (TSP). Withdrawals in Retirement
Watch one irreversible move. If you switch from life-expectancy-based payments to a fixed dollar amount, even by editing the payment figure, the change is permanent. You cannot switch back to the life-expectancy method.7BIE.edu Document Repository. Withdrawing from Your TSP Account for Separated and Beneficiary Participants
Traditional or Roth: Choosing the Source
If your account holds both Traditional and Roth money, you tell the TSP where the withdrawal comes from: Traditional only, Roth only, or proportional. If you do not specify, the plan defaults to a pro-rata split matching your existing balance ratio.8Thrift Savings Plan (TSP). Taking Money from Your Account
Roth withdrawals are not automatically tax-free. Your own Roth contributions come back tax-free because you already paid tax on them. The earnings portion is tax-free only if two conditions are both met: at least five years have passed since January 1 of the year of your first Roth TSP contribution, and you are 59½ or older or have a permanent disability.9Thrift Savings Plan (TSP). Roth In-Plan Conversions Pull Roth earnings before the clock runs out and you owe income tax on them.
Tax Withholding on Your Distribution
The TSP withholds federal income tax automatically on the taxable portion of any payment, at rates that depend on the distribution type.10Thrift Savings Plan (TSP). Changes to Tax Rules About TSP Payments
- 20% mandatory withholding on any eligible rollover distribution paid directly to you: partial and total post-separation withdrawals, age-59½ in-service withdrawals, and fixed-dollar installments expected to last fewer than 10 years. This rate is set by federal tax law, and you cannot reduce it.
- 10% default withholding on financial hardship withdrawals, required minimum distributions, and certain court-ordered or death-benefit payments.
- For installments lasting 10 years or more, or based on life expectancy, the TSP withholds as if you were single with zero exemptions unless you file a different election.
State income tax handling varies. Some states exempt retirement plan distributions; others tax them at regular income rates.
The 10% Early Withdrawal Penalty and Its Exceptions
If you take money before age 59½ and no exception applies, the IRS adds a 10% tax on the taxable portion, on top of ordinary income tax.11Internal Revenue Service. Topic No. 558, Additional Tax on Early Distributions from Retirement Plans Other Than IRAs
The exception most federal workers rely on is the separation-of-service rule. If you leave federal employment during or after the calendar year you turn 55, your post-separation TSP withdrawals are penalty-free.11Internal Revenue Service. Topic No. 558, Additional Tax on Early Distributions from Retirement Plans Other Than IRAs For qualified public safety employees, including federal law enforcement officers, federal firefighters, customs and border protection officers, and air traffic controllers, the age threshold drops to 50, or the penalty is waived entirely with at least 25 years of creditable service at separation.12Thrift Savings Plan (TSP). SECURE Act 2.0, Section 329 – Modification of Eligible Age for Exemption from Early Withdrawal Penalty for Qualified Public Safety Employees
Other exceptions include substantially equal periodic payments, deductible medical expenses above a set percentage of adjusted gross income, and distributions made under a qualified domestic relations order. Roth contributions you are simply getting back are never penalized, but Roth earnings withdrawn early are both taxable and penalized unless another exception applies.
Required Minimum Distributions
Once you have separated from service and hit your RMD age, the IRS requires annual distributions from your Traditional TSP balance. Your RMD age is 73 if you were born before 1960, and 75 if you were born in 1960 or later.8Thrift Savings Plan (TSP). Taking Money from Your Account The first RMD is due by April 1 of the year after both conditions are met. Every RMD after that must go out by December 31.
If you take less than required, the IRS charges a 25% excise tax on the shortfall, which drops to 10% if you correct the shortfall within two years.13Thrift Savings Plan (TSP). SECURE 2.0 and the TSP If you are still working in federal service past your RMD age, the TSP applies the “still working” exception and does not require distributions until you separate.
Financial Hardship Withdrawals
Active employees under 59½ (or who want to save their four annual age-59½ slots) can apply for a financial hardship withdrawal by showing one of these qualifying needs: negative monthly cash flow, unpaid medical expenses, a casualty loss, unpaid legal fees from a separation or divorce, or losses from a FEMA-declared major disaster.14Thrift Savings Plan (TSP). Financial Hardship
The minimum is $1,000. There is no annual cap on the number of hardship withdrawals, but you must wait six months between them.2Thrift Savings Plan (TSP). Withdrawals In-Service Hardship distributions cannot be rolled over into an IRA or another retirement plan, and they carry 10% federal withholding plus the 10% early withdrawal penalty if you are under 59½.10Thrift Savings Plan (TSP). Changes to Tax Rules About TSP Payments Your regular contributions keep going unless you separately stop them.
Rolling Over TSP Money to an IRA or Another Plan
Most TSP distributions are rollover-eligible: partial and total post-separation withdrawals, age-59½ in-service withdrawals, and fixed-dollar installments expected to last fewer than 10 years can go into a traditional IRA, a Roth IRA, or another employer’s eligible plan.15Thrift Savings Plan (TSP). Rollovers from the Thrift Savings Plan to Eligible Retirement Plans Hardship withdrawals cannot be rolled over. Neither can installments based on IRS life-expectancy tables or installments scheduled to last 10 years or more, because the IRS treats those as periodic income.
A direct rollover sends the money straight to the receiving institution and skips the 20% mandatory withholding.10Thrift Savings Plan (TSP). Changes to Tax Rules About TSP Payments If you take the check yourself, you have 60 days to complete the rollover, but 20% is withheld up front. To roll over the full amount, you have to replace that withheld portion from other funds.
Spousal Consent and Notification
Married FERS or uniformed services participants are covered by default with a joint-life survivor annuity based on the full account balance. Any withdrawal that deviates from that default — a partial distribution, a lump-sum payout, or a change to installments — requires your spouse’s written, notarized consent waiving the annuity right.16eCFR. 5 CFR Part 1650 Subpart G – Spousal Rights Notarization is required in person.
CSRS participants have lighter rules. Spousal consent is not required, but the TSP must notify your spouse whenever you apply for a withdrawal or change installments.16eCFR. 5 CFR Part 1650 Subpart G – Spousal Rights If a spouse cannot be located, you can request an exception by showing the Executive Director you made a reasonable effort to find them.
Outstanding TSP Loans When You Leave
An outstanding loan at separation leaves you with three choices: pay it off in full, set up post-separation monthly payments, or let the loan be foreclosed. Foreclosure turns the unpaid balance plus accrued interest into taxable income for that year.17Thrift Savings Plan (TSP). Information for TSP Participants Leaving Federal Employment If you are under 59½, that taxable amount can also trigger the 10% early withdrawal penalty.
While still employed, a pending loan blocks a withdrawal request from the same account, and a pending withdrawal blocks a loan. The TSP processes only one transaction at a time.2Thrift Savings Plan (TSP). Withdrawals In-Service Submit whichever is more urgent first and wait for it to clear.
Submitting the Request
Withdrawals start at tsp.gov or through the ThriftLine. The online portal walks you through the withdrawal type, the source (Traditional, Roth, or both), your bank routing and account details for direct deposit, and your tax withholding choices. If banking details are not on file, the TSP mails a paper check, which is much slower.
A new bank account or mailing address must sit on your record for at least seven days before it can receive funds.2Thrift Savings Plan (TSP). Withdrawals In-Service After you electronically sign, requests entered before noon Eastern time process that night; anything after noon processes the next business day.6Thrift Savings Plan (TSP). Withdrawals in Retirement Your bank may take another day or two to post the deposit. You can cancel or change a pending request up until noon on its scheduled processing day.
For married FERS and uniformed services participants, have the notarized spousal consent form ready before you begin. A missing consent is one of the most common reasons withdrawal requests stall.