What are TSP inservice withdrawalS – What is a TSP inservice withdrawal? 1-800-566-1002 What are the best types of TSP inservice withdrawals and learn how you can avoid the most common mistakes that individuals have made when looking to trigger their TSP in service withdrawal.

What are TSP in-service withdrawals?
TSP in-service withdrawals are withdrawals you can make from your TSP account while you are still employed by the federal government or a member of the uniformed services. In contrast to a TSP loan, which must be repaid with interest, in-service withdrawals permanently reduce your TSP account balance and cannot be paid back.
Types of TSP in-service withdrawals
There are two types of TSP in-service withdrawals: age-based withdrawals and financial hardship withdrawals.
Age-based withdrawals
Age-based withdrawals are available to participants who are 59 1/2 years of age or older. You may take up to four age-based withdrawals per calendar year, with each withdrawal being at least $1,000 or your entire vested account balance, whichever is less.
Terms and conditions of TSP in-service withdrawals
There are certain terms and conditions you need to be aware of when considering a TSP in-service withdrawal:
• You can only withdraw funds in which you are vested, based on your years of service.
• In-service withdrawals permanently deplete your TSP account, and the withdrawn amount cannot be paid back

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The Thrift Savings Plan (TSP) is a retirement savings plan for federal employees, including members of the uniformed services. One of the features of the TSP is the ability to make in-service withdrawals, which allow participants to take money out of their TSP account while they are still working.

In-service withdrawals are generally available to participants who are at least 59 and a half years old, although some exceptions apply. There are two types of in-service withdrawals: age-based withdrawals and financial hardship withdrawals.

Age-based withdrawals are available to participants who have reached the age of 59 and a half and who are still working. Participants can choose to take a partial or full withdrawal from their TSP account, but they may be subject to certain tax implications. It’s important to consult with a financial advisor or tax professional before making an in-service withdrawal to understand the potential tax consequences.

Financial hardship withdrawals are available to participants who are facing financial difficulties and who meet certain eligibility criteria. Examples of financial hardships may include medical expenses, impending foreclosure or eviction, and funeral expenses. Participants must provide documentation of their financial hardship and are limited to one financial hardship withdrawal per year.

In-service withdrawals are subject to certain restrictions and limitations. For example, participants who make an in-service withdrawal are generally prohibited from making contributions to their TSP account for six months following the withdrawal. Additionally, in-service withdrawals are not eligible for a loan, and participants cannot repay the amount withdrawn.

It’s important to carefully consider the implications of an in-service withdrawal before making a decision. While in-service withdrawals can provide much-needed funds in times of financial hardship or as a supplement to retirement income, they can also reduce the amount of savings available for retirement. Participants should weigh the benefits and drawbacks of an in-service withdrawal and consult with a financial advisor to determine the best course of action.

In conclusion, in-service withdrawals can be a useful tool for participants in the Thrift Savings Plan who are facing financial difficulties or who want to supplement their retirement income. However, participants should carefully consider the implications of an in-service withdrawal before making a decision and consult with a financial advisor or tax professional to ensure they make the best choice for their financial situation.