TSP in-service withdrawals: taking money out while you're still serving

There are two ways to take money out of the TSP while you're still working: an age-59½ withdrawal (no reason needed, up to four a year) and a financial hardship withdrawal (any age, only for specific reasons you certify under penalty of perjury). Both are at least $1,000, both permanently reduce your account, and neither can be paid back. If you're married and in FERS or the uniformed services, your spouse must consent.

The two types side by side

	Age-59½ withdrawal	Financial hardship withdrawal
Who can take it	Anyone 59½ or older still in federal civilian or uniformed service	Anyone still in service with a genuine financial hardship
What you can take	Your vested balance	Only your own contributions and their earnings (not agency or service contributions)
Amount	$1,000 or more, or your whole vested balance	$1,000 or more, limited to your financial need
How often	Up to 4 per calendar year	Not again for 6 months after the payment is processed
Federal tax withholding	20%, required on the taxable part (you can ask for more); none on amounts rolled over	10% on the taxable part; can be increased, decreased or waived
10% early-withdrawal penalty	No	Possible if you're under 59½
Roll over to an IRA?	Yes, all or part	No

Age-59½ withdrawals

Age 59½ or older, based on the date of birth your agency or service reported.
You can take up to four per calendar year.
You can only take money you're vested in. You're always vested in your own contributions and matching contributions; the 1% automatic contributions vest after a set number of years of service.
If you have both traditional and Roth money, you can take a dollar amount from one source only, all of one source, or a pro-rata mix.
Money in the mutual fund window has to be moved into a TSP fund first.

Financial hardship withdrawals

The TSP accepts these reasons:

Negative monthly cash flow (the worksheet in My Account on tsp.gov helps you calculate it)
Unpaid medical expenses that would be tax-deductible, for you, your spouse or dependents
Unpaid personal casualty losses, such as damage to property
Unpaid legal fees and court costs for a separation or divorce
Expenses and losses from a FEMA-declared major disaster

The rules:

You can only withdraw your own contributions and their earnings, including money you rolled into the TSP.
The amount is limited to your financial need. You can raise it up to 125% of that need to cover tax withholding.
You can't take another hardship withdrawal for six months after the payment is processed.
You don't send documents with the request, but you certify the hardship under penalty of perjury, so keep your records.
Your TSP contributions keep going unless you stop them.

Rules for both

Spouse consent: FERS and uniformed services participants who are married need their spouse's consent. CSRS participants' spouses are notified instead.
Only from the account tied to your current job. If you left the military and are now a federal civilian, you can only take an in-service withdrawal from your civilian account.
The 7-day rule: the bank account or address receiving the money must be on file for at least seven days.
It's permanent: once processed, a withdrawal can't be repaid or turned into a loan.
Combat-zone money: for service members with tax-exempt contributions, a proportional share comes out tax-free, but the earnings on it are taxable.

Loan or withdrawal?

If you're in pay status and eligible, the TSP suggests weighing a loan first. A loan isn't taxed unless you fail to repay it. The fee is $50 for a general-purpose loan or $100 for a primary-residence loan, and you pay yourself back with interest. A withdrawal is taxed right away, may carry the 10% penalty before 59½, and that money stops earning for good.

Common questions

Can I withdraw from my TSP while still in the military?

Yes, in two ways: an age-59½ withdrawal once you're 59½, or a financial hardship withdrawal at any age if you qualify. Each must be at least $1,000. If you're married, your spouse must consent.

How many in-service withdrawals can I take from the TSP?

Up to four age-59½ withdrawals per calendar year. After a financial hardship withdrawal, there's a six-month wait before another one.

What counts as a financial hardship for the TSP?

Negative monthly cash flow, unpaid deductible medical expenses, unpaid personal casualty losses, unpaid legal fees for a separation or divorce, and expenses or losses from a FEMA-declared major disaster.

Is a TSP hardship withdrawal taxed?

Yes. The traditional part is taxed as income, the TSP withholds 10% by default (you can change or waive it), and if you're under 59½ you may also owe the 10% early-withdrawal penalty. Roth contributions and tax-exempt combat-zone contributions come out tax-free.

Do my TSP contributions stop after a hardship withdrawal?

No. Your contributions continue unless you stop them yourself.

Sources

TSP booklet: In-Service Withdrawals (tspbk12), including the "In-Service Withdrawal Rules Table"
TSP: In-service withdrawals
5 CFR Part 1650, Subpart D: In-Service Withdrawals

Educational information, not financial or tax advice. Check tsp.gov or a tax professional before you take a withdrawal.