Rules for early TSP withdrawals


Q: I am a 44-year-old Federal Employees Retirement System employee. I have a financial planner who wants to explore withdrawing part of my Thrift Savings Plan and rolling it into a Roth individual retirement account to take advantage of the two-year payout of taxes. I told the financial planner we only have two options for TSP withdrawals: One is for hardship, and the other applies if you are more than 59 1/2 years old.

Because I do not meet either requirement, it appears to me that I cannot make an in-service withdrawal. Are there other options for in-service withdrawals? The financial planner says he is working with a 54-year-old postal worker and his TSP allows for an in-service withdrawal and conversion to a Roth IRA. I have always been under the impression the TSP was governed by one set of rules. Does each agency have different rules governing withdrawals?

I am wondering if perhaps the postal worker is with the Civil Service Retirement System. Would a CSRS employee be allowed to make an in-service withdrawal in this situation?

A: I’m not aware on any special exception to the rules for in-service withdrawals. By the way, make sure that you carefully consider the motives of your “planner” for recommending such a move. Does he stand to gain from it? I generally advise against it.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

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