Thirteen Things You Should Know about In-Service Withdrawals from Your TSP Sponsored by:Bill Hoff

Do you know TSP participants can withdraw from their Thrift Savings Plan while working, but only under certain conditions? In this article, we have listed 13 things that everybody should know about in-service withdrawals.

1. Differentiate between types of in-service withdrawals: age-based or hardship.

2. In-service withdrawal depletes your TSP account permanently, and it cannot be paid back.


3. To take an age-based withdrawal, you must be 59 ½ years old.

4. You are allowed to take only four age-based withdrawals in a year.

5. For federal income taxpayers, an age-based withdrawal is an eligible rollover distribution. 

6. You will have to pay federal income taxes in an in-service withdrawal (exempting qualified withdrawals from your Roth balance).

7. You will have to pay the penalty on hardship withdrawals if your age is under 59 ½ at the time you take an in-service withdrawal.

8. Like other withdrawal options, an in-service withdrawal will be deducted proportionately from your Roth and traditional balances unless you mention it. 

9. You can opt for a hardship withdrawal for these four reasons:

a. Negative cash flow

b. There will be legal expenses in context with separation and divorce

c. Unpaid medical expenses not covered by insurance

d. Due casualty losses not covered by insurance

10. A hardship withdrawal depends on your:

a. Hardship demonstrated

b. Contributions and earnings

11. No documents are required for a hardship withdrawal, but you will be asked to swear, under penalty of perjury, that you’re true to your word.

12. If you are under the Federal Employee Retirement System, you need to get signed, notarized consent of your spouse. 

13. The TSP publication, In-Service Withdrawals (, has given complete information on the topic last updated in September of 2019 including all changes following the TSP Modernization Act.

Make sure you have not depleted your retirement security by taking money out of your retirement savings while taking an in-service withdrawal. 


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