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TSP bulletin
for Agency and Service TSP Representatives

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New Rules and Processes for Financial Hardship In-Service Withdrawals

The purpose of this bulletin is to notify agencies/services that the Federal Retirement Thrift Investment Board (FRTIB) has implemented new withdrawal rules and processes for financial hardship in-service withdrawals as a result of the TSP Modernization Act of 2017. These changes take effect on September 15, 2019.

This bulletin supersedes TSP Bulletins 12-14 and 12-U-12, Consolidation of Forms TSP-76, Financial Hardship In-Service Withdrawal Request (Civilian) and TSP-U-76 (Uniformed Services), and changes to TSP Financial Hardship In-Service Withdrawal Processing to include the Roth TSP, dated May 7, 2012.

Any copies of Form TSP-76/TSP-U-76, Financial Hardship In-Service Withdrawal Request, with a date prior to September 2019 are obsolete and will no longer be processed. Those obsolete forms should be immediately discarded (recycled), and agencies/services that provide links to electronic versions of those forms should disable those links.

Requirements for a Financial Hardship In-Service Withdrawal

Current federal civilian employees and members of the uniformed services are able to request a financial hardship in-service withdrawal from their TSP accounts.

To qualify for a hardship withdrawal, the participant must have an immediate and significant financial need that necessitates a distribution from his or her TSP account. The need must arise out of either a recurring negative monthly cash flow situation, medical expenses, legal expenses for separation or divorce, or personal casualty loss. Hardship requests cannot be taken for expenses already paid or those that are reimbursable.

The participant’s TSP account must have at least $1,000 of their own contributions and earnings on those contributions.

The participant cannot have received a financial hardship in-service withdrawal from the same account within the previous 6 months.

Changes to Financial Hardship In-Service Withdrawals

The FRTIB has made the following changes related to financial hardship in-service withdrawals:

  • The rule requiring employee contributions to be suspended for six months when a participant takes a financial hardship withdrawal is eliminated as of September 15, 2019. The following will result from this rule change:
    • Participants who took a financial hardship withdrawal during the six months prior to September 15, 2019, will receive a TSP notice alerting them that they can resume contributions on that date. Restarting TSP contributions is the participant’s responsibility. Participants and agencies/services will still need to follow current procedures to resume contributions by having the participant access their employer pay system, or by completing Form TSP-1/TSP-U-1, Election Form.
    • Beginning September 15, 2019, taking a financial hardship withdrawal will have no effect on a participant’s contributions.
    • Report 5501 (Financial Hardship In-Service Withdrawal Report) is now obsolete.
  • Participants are able to choose whether their financial hardship withdrawals come from their Roth balance only, their traditional balance only, or pro rata from both.

Requesting a Financial Hardship In-Service Withdrawal

Participants should use the online tool on the TSP website ( to initiate a financial hardship in-service withdrawal request. To access the tool, participants must log into My Account and click on “Withdrawals and Changes to Installment Payments,” then click on “Financial Hardship In-Service Withdrawal.” This online tool will guide the participant through the request by prompting the participant to answer questions. Based on those answers, the online tool will generate Form TSP-76 (WEB), Financial Hardship In-Service Withdrawal Request, which is a summary of the request with the participant’s provided information. Depending on the circumstances, the request may be completed entirely online. If signatures or additional information is required, the participant will need to print the form, gather the necessary signatures, have the form notarized, and then send it to the TSP. Note: The pages included in Form TSP-76 (WEB) will be variable, depending on what the TSP requires in a given case. If a participant alters any of the pre-printed information on the TSP-76 (WEB) form, the form will not be processed.

Additional Information for Participants

The TSP booklet In-Service Withdrawals includes information about in-service withdrawals and how they affect participants’ accounts. Agency/Service representatives should strongly recommend that participants read this booklet and the TSP tax notice Important Tax Information About Payments From Your TSP Account before requesting an age-based in-service withdrawal.