TSP 70 Full Withdrawal Form for Federal Employees in 2025

Understanding TSP Form 70: Request for Full Withdrawal in 2025

The Thrift Savings Plan (TSP) stands as one of the most important long-term financial resources available to federal employees and members of the uniformed services. It is a powerful, tax-advantaged retirement savings program designed to help you build wealth throughout your federal career. Whether you served under the Federal Employees Retirement System (FERS), the Civil Service Retirement System (CSRS), or in a military capacity, your TSP account is a core part of your retirement income.

Once you retire or separate from service, you must determine how and when to access your TSP funds. This is where Form TSP-70, the request for full withdrawal, becomes relevant. It allows you to formally initiate the distribution of your full TSP account balance. While the process may appear straightforward, the decisions you make at this stage are critical. Each withdrawal option offered under TSP-70 can affect your taxes, long-term income security, and overall financial flexibility.

In 2025, as the economic environment continues to shift and life expectancy increases, the importance of understanding how to use Form TSP-70 wisely cannot be overstated.

Who Should Use Form TSP-70

Form TSP-70 is the official vehicle for requesting a complete withdrawal of your TSP account once you’ve left federal service. This form is appropriate for individuals who:

Have separated from federal or uniformed service and are no longer eligible to contribute to the TSP.
Are not currently receiving monthly installment payments or have not already submitted a different withdrawal form.
Wish to fully access their TSP funds in one or more withdrawal methods available.

Do not use this form if you only wish to take a partial withdrawal (use TSP-77) or need to request a required minimum distribution (use TSP-99).

When to Submit the Form

You may submit TSP-70 after your separation from service has been officially reported to the TSP by your agency or branch of service. This reporting process is crucial and must be completed before your withdrawal request can be processed. It usually takes a few weeks following your final day of employment, but processing times may vary depending on your agency.

Waiting too long to take action could result in the TSP distributing funds automatically to satisfy IRS requirements. Specifically:

If you’re age 73 or older, you must begin taking Required Minimum Distributions (RMDs) by April 1 of the year following the year you turn 73.
If no withdrawal election is made, the TSP may distribute funds based on IRS guidelines, which might not align with your preferences.

Monitoring your separation status and confirming its update in your TSP account is essential before submitting this form.

Options You Can Choose on TSP-70

TSP-70 provides flexibility in how you receive your funds. You can choose one method or combine multiple methods depending on your retirement needs. The options include:

1. Lump-Sum Payment

This option provides your entire TSP account balance as a single, one-time distribution. It’s ideal if you need immediate access to the funds for a large expense, debt payoff, or reinvestment. However, there are drawbacks:

A mandatory 20% federal income tax withholding applies.
You could be pushed into a higher tax bracket.
A 10% early withdrawal penalty may apply if you are under age 59½ (with some exceptions).

The lump-sum method offers convenience but also carries the most significant immediate tax burden.

2. Monthly Payments

You can opt to receive your funds in monthly installments, which offers ongoing income in retirement. Monthly payments can be calculated in two ways:

Fixed-dollar amount: You choose the amount you receive each month.
Life expectancy: The amount is calculated based on IRS life expectancy tables and recalculated each year.

You may change the amount or method once each calendar year. Payments must be at least $25 per month and continue until the account is exhausted or you request a different withdrawal method.

This method mimics a pension and allows for more manageable tax planning.

3. Life Annuity Purchase

You may choose to use all or a portion of your TSP account to purchase a life annuity. This option converts your savings into a stream of guaranteed income that you cannot outlive. Features include:

Single or joint life coverage.
Optional increasing payments to adjust for inflation.
Guaranteed payout periods, such as 10 or 20 years.

However, purchasing a life annuity is irreversible, and once selected, it cannot be altered. Also, you lose access to the underlying funds, which can limit flexibility in emergencies.

4. Rollover to IRA or Employer Plan

Another popular option is to transfer your TSP balance to an eligible retirement account, such as:

A Traditional IRA or Roth IRA.
Another qualified employer-sponsored retirement plan like a 401(k).

Advantages of this method include tax deferral and more flexible investment choices. However, a few key things to remember:

A direct rollover avoids the 20% withholding.
Roth TSP money must be rolled into a Roth IRA or Roth-designated account.
If the funds are distributed to you and rolled over within 60 days, you must replace any withheld taxes out of pocket to avoid penalties.

Rolling over funds can simplify your retirement accounts and allow for continued tax-advantaged growth.

Tax Considerations in 2025

Understanding the tax implications of your TSP withdrawal in 2025 is critical to avoiding surprises. Here are the key points:

Traditional TSP withdrawals are taxed as ordinary income in the year received.
Roth TSP withdrawals are tax-free only if:
- You are at least 59½, and
- You made your first Roth contribution at least five years ago.
If you’re under 59½, a 10% early withdrawal penalty may apply unless you qualify for exceptions.

The TSP will send you IRS Form 1099-R by January 31 of the following year, summarizing the taxable portion of your withdrawal. Work with a tax advisor to plan your withdrawals and avoid triggering large one-time tax obligations.

How to Submit the TSP-70 Form

In 2025, TSP has modernized its submission process to make withdrawals more accessible. You can choose one of two methods:

Electronic Submission

Log into your secure account at tsp.gov
Select the “Withdrawals” section
Follow the step-by-step prompts to complete your form
Confirm your elections and electronically sign

This method is typically faster and allows real-time confirmation of submission.

Paper Submission

Visit the TSP website to download the latest version of Form TSP-70
Complete each section carefully, and sign where indicated
Mail the form to the address listed on the final page

Allow 10 to 14 business days for paper forms to be processed. Processing could be delayed if documentation is incomplete or if your separation hasn’t been confirmed by your agency.

Things to Confirm Before You Submit

Before finalizing your TSP-70 submission, take time to review the following details:

Current mailing address and contact information
Direct deposit information for faster delivery of funds
Your selected tax withholding preferences
Whether you want to combine multiple withdrawal options

Also consider reviewing and updating your TSP beneficiary designations—while not directly related to your withdrawal, it ensures your remaining assets are handled according to your wishes.

Required Minimum Distributions (RMDs)

As of 2025, the RMD age is 73. If you reach this age during or after 2025, you must take your RMD by April 1 of the year following the year you turn 73, and each subsequent year by December 31.

If you request a full withdrawal and are subject to RMDs, the TSP will process the required amount first and then apply your withdrawal instructions to the remaining balance.

Missing an RMD may trigger a 25% IRS penalty on the required amount not withdrawn. This penalty can drop to 10% if corrected in time. You can avoid this by withdrawing at least the required amount each year.

Avoiding Costly Errors

Avoid these common mistakes when using Form TSP-70:

Failing to confirm separation status before submitting the form
Choosing an annuity without understanding its irreversible nature
Ignoring the tax effects of a large lump-sum withdrawal
Forgetting to consider how Roth funds are treated
Missing an RMD deadline

Taking the time to understand your options and verify your details will help you steer clear of these issues.

Long-Term Impact on Retirement Security

Your TSP withdrawal strategy can significantly influence your financial future. Decisions made through Form TSP-70 will affect:

How long your retirement income lasts
Your ability to adjust for inflation or emergencies
The overall tax efficiency of your withdrawals
Your estate and inheritance goals

A full withdrawal may seem like a clean break, but it carries risks if not paired with a clear financial plan. You must assess not only your short-term needs but also your long-term ability to meet ongoing expenses.

Reemployment After Withdrawal

If you return to federal employment after withdrawing your TSP balance, you will:

Begin with a new TSP account
Need to re-enroll to resume contributions
Be subject to current-year contribution limits (in 2025: $23,500, with catch-up options if eligible)

Your previous account will not be reinstated. If you anticipate returning to public service in the future, consider whether a full withdrawal aligns with your plans.

A Decision Worth Careful Planning

Form TSP-70 offers you flexibility and access to the savings you’ve built over your federal career. But with that flexibility comes responsibility. Your choices can shape your retirement lifestyle, affect your tax liabilities, and determine how much financial security you’ll have in your later years.

Before you submit the form, take a moment to evaluate all options and consider how each aligns with your needs. Planning now can protect your income, reduce taxes, and give you peace of mind.

Consult a Licensed Agent Before Taking Action

If you’re feeling unsure about which withdrawal method fits your situation best, you’re not alone. The TSP system provides excellent tools—but nothing replaces tailored advice.

To make the most of your retirement savings and avoid costly missteps, connect with a licensed agent listed on this website. A professional can walk you through your choices, explain the trade-offs, and help you build a withdrawal strategy that supports your goals in retirement.