What Qualifies for a TSP Financial Hardship Withdrawal?

What are the requirements and consequences one must take into account to make a Financial Hardship Withdrawal from your TSP account? The author outlines the basic guidelines.


I would like to withdraw money from my Thrift Savings Plan (TSP) account for medical care, but I don’t think I’m old enough to take a withdrawal. Is there some sort of provision for this?

What’s being referred to here is a Financial Hardship Withdrawal.

To qualify for a Financial Hardship Withdrawal you must have:

  • Recurring negative monthly cash flow
  • Medical expenses (including household improvements needed for medical care) that you have not yet paid and that are not covered by insurance
  • Personal casualty loss(es) that you have not yet paid and that are not covered by insurance
  • Legal expenses (such as attorneys’ fees and court costs) that you have not yet paid for separation or divorce from your spouse

Additional Requirements Include:

  • You cannot withdraw less than $1,000.
  • You may only withdraw your own contributions and any earnings those contributions have accrued.
  • If you have two separate TSP accounts — a civilian TSP account and a uniformed services account — you can only make a financial hardship withdrawal from the account associated with your active employment at the time of your withdrawal. However, if both of your accounts are associated with your active employment, you can make a financial hardship withdrawal from each account.
  • You are limited to only one financial hardship withdrawal in a 6-month period.

What are the consequences?

Your financial hardship withdrawal is subject to Federal income tax and, in some cases, state income tax. If you are younger than 59½, you may have to pay a 10% early withdrawal penalty tax. Any tax-exempt or Roth contributions included in your withdrawal are not subject to Federal income tax; neither are any qualified Roth earnings.

After making a financial hardship withdrawal, you cannot contribute to your TSP account for 6 months. If you are a FERS participant, you will not receive any Agency Matching Contributions for the period during which you are not making employee contributions. However, your Agency Automatic (1%) Contributions will continue.

If you are a member of the uniformed services, when your employee contributions from basic pay stop, any contributions from incentive pay and special pay, including bonuses, will also stop.

Much of this information was taken from tsp.gov and you can find more information there.

About the Author

Cooper Mitchell is a financial advisor dedicated to helping federal employees take control of their retirement.