Retirement Account or Savings Account
The money you put in your TSP account is for your retirement. It is not meant to be a savings account that can be withdrawn at any time.
An Alternative to In-Service Withdrawal
In certain situations, it might be more advantageous for you to take a loan from your TSP account. For more information and to learn if you are eligible, visit TSP Loans.

In-service withdrawals are withdrawals you make from your TSP account while you are still actively employed in Federal service or a member of the uniformed services.

The TSP permits two types of in-service withdrawals: financial hardship and age-based.

Before You Make an In-Service Withdrawal

 

An in-service withdrawal can have a serious impact on your TSP account. Remember that the purpose of your account is to accumulate savings so that you will have income during retirement. If you withdraw money now, you'll have less money later. So, you should be aware of the following:

  • When you take an in-service withdrawal, you cannot return or repay the money you remove from your TSP account. You permanently reduce your retirement savings by the amount of the withdrawal as well as any future earnings you would have accrued on that money.
  • You are subject to income taxes on your withdrawal except on any portion that consists of tax-exempt contributions, Roth contributions, or qualified Roth earnings. With a hardship withdrawal, you may be subject to the IRS 10% early withdrawal penalty tax.
  • If you take a financial hardship withdrawal, you will not be able to make contributions to your account for 6 months. Also, if you are a FERS participant, you will not receive any Agency Matching Contributions for 6 months. This lost opportunity could amount to a significant sum of money.
  • Spouse's rights affect your in-service withdrawal. If you are a married FERS participant or a member of the uniformed services, your spouse must sign a consent waiver for your in-service withdrawal. If you are a married CSRS participant, the TSP must notify your spouse before the in-service withdrawal can be made. These rights apply even if you are legally separated from your spouse.
Be sure to read the booklet In-Service Withdrawals completely before you begin the application process.