TSP 75

Understanding TSP 75 in 2025: Your Age-Based In-Service Withdrawal Option

As a federal employee or a member of the uniformed services, your Thrift Savings Plan (TSP) is more than just a retirement account—it’s a cornerstone of your financial future. Over years or even decades of service, your TSP grows through consistent contributions, matching funds from your agency or service branch, and compounded investment returns. But what if a situation arises where you need to access some of these funds before leaving your job?

This is where the TSP 75 withdrawal comes into play. As of 2025, this age-based in-service withdrawal option remains a valuable resource for those who meet the criteria. If you are at least 59½ and still actively working in a federal position or in uniformed service, the TSP 75 allows you to withdraw money from your TSP without separating from service—and without facing an early withdrawal penalty. Whether you’re exploring phased retirement, consolidating debt, or covering major personal expenses, TSP 75 can be a strategic financial tool when used wisely.

With digital platforms now handling most of the TSP’s transactional functions, the process has never been more efficient. Yet, it’s crucial to understand all the moving parts, from eligibility to tax rules to how withdrawals may impact your long-term retirement picture.

What Is the TSP 75 Withdrawal?

The TSP 75 withdrawal is an age-based in-service option that permits a one-time withdrawal during any calendar year for eligible participants who are at least 59½ years old and still employed in federal service. Unlike hardship withdrawals or post-separation distributions, TSP 75 is a planned, voluntary mechanism that can be adapted to fit a variety of personal and financial goals.

In 2025, you can make this withdrawal from your Traditional TSP, Roth TSP, or both, depending on your account makeup. This option provides a middle ground: you get access to a portion of your retirement savings without giving up the benefits of continued contributions and federal service.

Common reasons participants consider a TSP 75 withdrawal include:

• Addressing upcoming large expenses without incurring debt
• Making down payments on property or funding major home improvements
• Reallocating funds into more flexible or diversified retirement vehicles
• Funding a spouse’s or dependent’s education
• Engaging in phased retirement while supplementing current income

The flexibility of this option makes it particularly attractive to those who may not yet be ready to retire but want access to their accumulated resources for practical reasons.

Eligibility Criteria in 2025

To use the TSP 75 withdrawal option, you must satisfy the following criteria:

• Be at least 59½ years old at the time of the request.
• Be actively employed in a federal position or serving in the uniformed services.
• Have a vested balance in your TSP account.

For most participants, employee and matching contributions are immediately vested. However, agency automatic contributions under FERS may require either two or three years of service, depending on your appointment type.

It’s important to understand that eligibility is strictly age- and employment-based. Your retirement system—whether FERS, CSRS, or uniformed services—does not affect your qualification for this withdrawal. You do not need to be retirement-eligible in the traditional sense.

How to Initiate a TSP 75 Withdrawal in 2025

The process for initiating a TSP 75 withdrawal has been streamlined through the TSP website. Here’s a step-by-step breakdown:

1. Log in to your secure TSP online account.
2. Go to the “Withdrawals and Changes” section.
3. Select “Age-Based In-Service Withdrawal.”
4. Specify whether you want a partial amount or a full balance withdrawal.
5. Choose your method of disbursement: direct payment or direct rollover.
6. Enter tax withholding and Roth distribution preferences, if applicable.
7. Complete and submit spousal consent documentation if required.
8. Review your information and submit your request electronically.

It’s important to note that this type of withdrawal is limited to one per calendar year. You should be strategic about timing your request and ensure that your personal information, direct deposit details, and spousal records (if relevant) are fully updated.

After the Withdrawal: What Doesn’t Change

Making a TSP 75 withdrawal does not close your account or alter your eligibility to continue contributing. After the withdrawal, you can:

• Keep contributing to TSP through payroll deductions
• Receive matching agency or service contributions (if applicable)
• Modify your investment allocations
• Rebalance your portfolio as needed
• Continue tracking your progress toward retirement

The only limitation is that you must wait until the next calendar year to make another age-based in-service withdrawal. Other types of withdrawals, such as hardship or separation withdrawals, are subject to different rules and may still be available depending on your circumstances.

Tax Treatment of TSP 75 Withdrawals

Understanding the tax implications of your withdrawal is vital. Here’s what to expect in 2025:

• Traditional TSP withdrawals: These are fully taxable as ordinary income. TSP will withhold 20% federal income tax by default unless you elect a direct rollover.
• Roth TSP withdrawals: These are tax-free if your Roth account is at least five years old and you are at least 59½. If these conditions aren’t met, any earnings portion will be taxable.

You will receive an IRS Form 1099-R in January 2026 reflecting the distribution amount and taxes withheld. This form is crucial for filing your federal and state income taxes.

By opting for a direct rollover to a traditional or Roth IRA, you can defer taxes or control the timing of your tax liability. If you make a mistake—such as taking a check and not completing a rollover within 60 days—you could face unexpected tax consequences.

Transfer and Rollover Options

TSP 75 withdrawals don’t have to be distributed as cash. You may direct all or part of the withdrawal to:

• A Traditional IRA, which maintains tax-deferred status.
• A Roth IRA, which is a taxable conversion from a Traditional TSP balance.
• An eligible employer-sponsored plan, such as a 401(k).

Transferring your withdrawal helps preserve your retirement capital and often allows greater flexibility in investment choices. Be sure to coordinate with the receiving financial institution and complete all required fields in your TSP withdrawal request.

Limited Use of the Paper Form TSP-75

Though Form TSP-75 is officially considered obsolete in 2025, it may still be used under certain circumstances, including:

• You lack internet access or cannot navigate the online system.
• Your spouse must provide notarized consent, which cannot be done digitally.
• Your financial institution requires a paper authorization for rollover.

In these cases, make sure to download the most current version of Form TSP-75, complete it accurately, and include all supporting documents. Delays in processing are more common with paper forms, so verify all information thoroughly before submitting.

Strategic Considerations Before Making a Withdrawal

Before proceeding with a TSP 75 withdrawal, take time to consider its long-term implications:

• Will this withdrawal significantly reduce your retirement income?
• Can the expense be covered through non-retirement assets?
• Have you planned for Required Minimum Distributions (RMDs) starting at age 73?
• Are there alternative strategies such as a TSP loan or phased retirement?

Remember that once funds are withdrawn from TSP, they cannot be redeposited. Make sure the decision supports your broader retirement objectives.

Comparing TSP 75 to Other Withdrawal Methods

Here’s a quick comparison of the main TSP withdrawal types:

• TSP 75 – Age-Based In-Service Withdrawal: Available to employed participants age 59½ or older. One per year.
• TSP 70 – Post-Separation Withdrawal: Available after separation. Can be taken as a lump sum, installment payments, annuity, or combination.
• TSP 76 – Financial Hardship Withdrawal: Requires documentation of hardship. Subject to income taxes and potential loss of contributions.

TSP 75 stands out for allowing early, penalty-free access without ending federal employment. It’s best used as a bridge to other financial goals, not a primary source of income.

Spousal Consent Rules in Detail

If you are married and your TSP contains any Traditional balance, federal law requires spousal consent for most withdrawal types, including TSP 75. Your spouse must:

• Be informed of the withdrawal
• Provide notarized written consent
• Sign the appropriate section of the online or paper request

In the event of divorce, widowhood, or legal separation, the requirement may be waived—but documentation must be on file with TSP. If your status has changed, update it before initiating your withdrawal.

Timeline and Processing Expectations

Processing times vary based on the method of request:

• Online submissions: 3–5 business days for electronic processing and payment.
• Paper submissions: 10–15 business days, depending on document completeness.

Ensure all required data is accurate, including:

• Bank routing and account numbers
• Mailing address and contact details
• Spousal documentation
• IRA or employer plan information (for transfers)

Watch for email or mail confirmation once your request has been approved.

Using TSP 75 as a Planning Tool in 2025

The TSP 75 withdrawal is more than a simple transaction—it’s a retirement strategy tool. Used appropriately, it can allow you to:

• Manage tax brackets by spreading income
• Shift funds to more flexible retirement accounts
• Fund specific financial milestones without resorting to high-interest debt

However, tapping into your retirement savings early comes with the responsibility to stay on track for your ultimate goal: financial security throughout retirement.

Work with a Professional for Peace of Mind

Using TSP 75 in 2025 may be straightforward procedurally, but its implications are personal and far-reaching. Every decision you make about accessing your retirement funds impacts the future version of you.

If you’re uncertain about taxes, spousal requirements, transfer logistics, or long-term planning, it’s smart to consult with a professional. Reach out to a licensed agent listed on this website for one-on-one support tailored to your situation. A clear understanding today leads to smarter choices tomorrow.