TSP Withdrawal Guide 2026: How to Get Your Money Out

Last Updated: January 21, 2026 Reading Time: 10 min

Getting money out of your TSP shouldn't feel like navigating a bureaucratic maze. But if you've ever read Reddit threads about TSP withdrawals, you know the frustration: "Every withdrawal from the TSP is painful and archaic."

The truth is, TSP withdrawals aren't complicated once you understand the process. The problem is nobody tells you the realistic timeline, the spousal consent requirements, or the critical Rule of 55 that could save you thousands in penalties.

This guide covers everything: when you can withdraw, how long it actually takes, the tax implications, and the mistakes that cost federal retirees money.

Key Takeaways

• Plan for 5-7 weeks from retirement to first withdrawal (agency reporting + processing + bank verification)
• Rule of 55 is critical: Penalty-free TSP withdrawals if you separate at 55+, but you lose this if you roll to an IRA
• FERS requires notarized spousal consent for all withdrawals, even if you're legally separated
• Add your bank info to TSP NOW, before you need it (7-day waiting period for new accounts)
• Roth TSP has RMDs at age 73, unlike Roth IRA. Roll to Roth IRA after separation to avoid this
• Installments are far more popular than annuities: fewer than 1,000 TSP annuities purchased in 2022

The Realistic TSP Withdrawal Timeline

Forget what you've heard about "7-10 business days." That's just the processing time after you submit your request. Here's what actually happens after you retire:

Phase	Timeframe	What Happens
Agency Reporting	Day 1-30	Your agency reports your separation to TSP (can take up to 30 days)
Confirmation	~Day 30	You receive mail confirming separated status
Request Window	Day 30+	You can now request withdrawals in My Account
Bank Verification	Day 30-37	If adding new bank info, must wait 7 days
Processing	Day 37-47	Withdrawal processed (7-10 business days)

Total realistic timeline: 5-7 weeks from retirement to first withdrawal

This is why you need bridge funds. Your annual leave payout might arrive before your first TSP withdrawal. Don't count on immediate access.

Do This NOW to Save Time Later

Add your direct deposit info to your TSP My Account today. If you wait until you need the money, you'll add 7 days to your timeline. The bank must be on file for 7 days before it can receive funds.

TSP Withdrawal Options Explained

After separation, you have five main options. You can combine multiple options.

1. Leave It in TSP

Keep your money invested with TSP's ultra-low fees (0.04%). You can withdraw whenever you want, and the money continues growing tax-deferred.

Best for: Those not needing funds yet Minimum: $200 balance to keep account open

2. Partial Withdrawals

Take a one-time lump sum of any amount $1,000 or more. No limit on how many you take, but only one per 30-day period.

Best for: Specific expenses (car, home repair, medical) Recent change: Used to be limited to one lifetime partial withdrawal. Now unlimited.

3. Installment Payments

Regular payments: monthly, quarterly, or annually. Choose a fixed dollar amount ($25 minimum) or life-expectancy based payments that recalculate each year.

Best for: Predictable retirement income stream Flexibility: Can change amount, frequency, or stop anytime

4. TSP Life Annuity

Purchase guaranteed lifetime income through MetLife (TSP's sole provider). Payments continue no matter how long you live.

Best for: Those wanting guaranteed income beyond FERS pension and Social Security Caution: Irrevocable. Once purchased, you cannot change it or get your money back.

Reality check: Fewer than 1,000 TSP annuities were purchased in 2022. Most retirees prefer installments because FERS pension + Social Security already provide guaranteed income.

5. Rollover to IRA

Transfer your TSP balance to an IRA or other employer plan. More investment options, but potentially higher fees.

Critical warning: If you roll TSP to an IRA before age 59 1/2, you lose the Rule of 55 (see below).

The Rule of 55: Don't Lose This Benefit

The Rule of 55 is one of TSP's biggest advantages over IRAs.

How it works: If you separate from federal service in the calendar year you turn 55 or later, you can withdraw from TSP without the 10% early withdrawal penalty.

Why it matters: IRA rules require age 59 1/2 for penalty-free withdrawals. That's a 4.5-year difference.

Account	Penalty-Free Age
TSP (Rule of 55)	55
TSP (LEO/firefighter/ATC)	50
IRA	59 1/2

The critical mistake: Rolling your TSP to an IRA before 59 1/2 means you lose the Rule of 55 benefit on that money. You'd owe 10% penalty on any withdrawals before 59 1/2.

Smart strategy: Keep enough in TSP to cover expenses from 55 to 59 1/2. Roll the rest to an IRA if you want more investment options.

SECURE 2.0 Bonus for Public Safety

Public safety employees with 25+ years of service can now withdraw from their employer plan at any age without the 10% penalty. This applies to law enforcement, firefighters, and air traffic controllers.

Spousal Consent: FERS vs CSRS

This catches many retirees off guard. If you're married and covered by FERS, your spouse has legal rights to your TSP balance.

FERS and Uniformed Services

• Spouse has right to joint and survivor annuity (50% survivor benefit) with full balance
• All withdrawals require notarized spousal consent
• Applies even if you're legally separated (until divorce is final)
• Consent is irrevocable once TSP receives it

CSRS

• Spouse has no legal right to TSP balance
• TSP must notify spouse of withdrawals
• No consent required

Getting an Exception

Can request exception via Form TSP-16 if:

• Spouse's whereabouts are unknown
• Exceptional circumstances (strict criteria)

A separation agreement or prenup alone does NOT qualify for an exception.

Tax Rules for TSP Withdrawals

Traditional TSP

• Fully taxable as ordinary income
• TSP withholds 20% by default on lump sums
• Large withdrawals can push you into higher tax brackets

Roth TSP Withdrawals

Qualified (Tax-Free) if BOTH conditions met:

1. You're 59 1/2 or older, AND
2. It's been 5 years since January 1 of your first Roth TSP contribution year

Unqualified (Partially Taxable):

• Your contributions come out tax-free
• Earnings are taxable plus possible 10% penalty

10% Early Withdrawal Penalty Exceptions

Even before 59 1/2, you avoid the 10% penalty if:

Exception	Requirement
Rule of 55	Separated in year you turn 55+
Rule of 50	LEO/firefighter/ATC, separated in year you turn 50+
25+ Years Service	Public safety with 25+ years (SECURE 2.0)
Disability	Permanent and total
72(t)/SEPP	Substantially equal periodic payments
Death	Distribution to beneficiary

Required Minimum Distributions (RMDs)

You can't keep money in TSP forever. At age 73, you must start taking Required Minimum Distributions.

Key RMD Rules

• Start age: 73 (or 75 if born in 1960 or later)
• First year flexibility: Can delay first RMD until April 1 of following year (but then you owe two RMDs that year)
• Calculation: Prior year Dec 31 balance divided by IRS life expectancy factor
• Missed RMD penalty: 25% of amount you should have taken (10% if corrected within 2 years)

TSP Auto-Sends Your RMD

If you haven't withdrawn enough by November, TSP automatically calculates and sends your RMD. You'll receive it whether you wanted it or not.

Roth TSP Has RMDs (Unlike Roth IRA)

This surprises many people. Roth TSP is subject to RMDs at age 73.

Solution: Roll your Roth TSP to a Roth IRA after separation. Roth IRAs have no RMDs, so your money can continue growing tax-free as long as you want.

Model Your TSP Withdrawals

Use the free TSP Calculator to project how long your balance will last at different withdrawal rates. Input your current balance, expected returns, and desired monthly income to see if your strategy is sustainable.

The calculator also helps you:

• Compare 4% rule vs RMD-based withdrawals
• Project balance at different retirement ages
• Factor in other income (FERS pension, Social Security)

8 TSP Withdrawal Mistakes to Avoid

1. Rolling to IRA Before 59 1/2

You lose the Rule of 55. Keep enough in TSP to cover expenses from separation to 59 1/2, then roll the rest.

2. Not Adding Bank Info in Advance

New bank accounts have a 7-day waiting period before they can receive funds. Add your account to My Account now.

3. Expecting Immediate Access

Agency reporting (30 days) + processing (7-10 days) + potential bank wait (7 days) = 5-7 weeks. Have bridge funds ready.

4. Forgetting Spousal Consent (FERS)

Withdrawal denied without notarized spouse signature. Get this done in advance, especially if traveling or spouse is frequently unavailable.

5. Treating Roth TSP Like Roth IRA

Roth TSP has RMDs at 73. Roll to Roth IRA after separation to avoid this.

6. Taking Large Lump Sum Without Tax Planning

$200,000 withdrawal in one year could push you into the 32% bracket. Consider spreading across multiple years.

7. Missing the December 29 Deadline

Withdrawals after noon ET on December 29 count as next year's income. Submit early if tax timing matters.

8. Breaking 72(t)/SEPP Rules

If you start substantially equal periodic payments before 59 1/2 and deviate from the schedule, the 10% penalty applies retroactively to ALL prior withdrawals.

Frequently Asked Questions

How long does it take to get money from my TSP after I retire?

Plan for 5-7 weeks from retirement to first withdrawal. Your agency has up to 30 days to report separation, then TSP takes 7-10 business days to process. If adding new bank info, add another 7 days. Add your direct deposit info to My Account now, before you retire.

Can I withdraw from my TSP while still employed?

Yes, with restrictions. At 59 1/2 or older, you can take an age-based in-service withdrawal with no penalty. Under 59 1/2, you can only take a financial hardship withdrawal, which requires certifying genuine hardship (negative cash flow, medical expenses, legal fees for divorce, FEMA-declared disaster). Hardship withdrawals are limited to your own contributions plus earnings.

What is the TSP Rule of 55?

The Rule of 55 lets you withdraw from TSP without the 10% early withdrawal penalty if you separate from federal service in the calendar year you turn 55 or later. This is better than IRA rules, which require age 59 1/2. If you roll TSP to an IRA, you lose this benefit. For LEO, firefighters, and ATCs, the rule is age 50.

Does my spouse have to approve my TSP withdrawal?

For FERS and uniformed services: Yes, your spouse must provide notarized consent for any withdrawal, even if you're legally separated. For CSRS: No consent required, but TSP must notify your spouse. Exceptions via Form TSP-16 are available if spouse's whereabouts are unknown.

What's the difference between TSP installments and a TSP annuity?

Installments: You choose the amount and frequency, your money stays invested in TSP, you can change or stop payments anytime, but your balance could run out. Annuity: You buy guaranteed lifetime income from MetLife, payments continue no matter how long you live, but the money is gone (irrevocable) and you lose investment control. Installments are far more popular because FERS pension and Social Security already provide guaranteed income.

When do I have to start taking RMDs from my TSP?

RMDs begin at age 73 (or 75 if born 1960 or later). You can delay your first RMD until April 1 of the following year, but then you'll owe two RMDs that year. TSP automatically sends your RMD if you haven't withdrawn enough by November. Unlike Roth IRAs, Roth TSP is subject to RMDs. Roll Roth TSP to Roth IRA after separation to avoid this.

Can I take multiple partial withdrawals from TSP?

Yes, there's no limit on total partial withdrawals, but only one per 30 calendar days. Each must be at least $1,000. You can take partials even while receiving installment payments. This flexibility is relatively new: previously, retirees were limited to one partial withdrawal in their lifetime.

Related Resources

• TSP Guide 2026: Complete guide to contribution limits, fund options, and strategy
• TSP Calculator: Model your withdrawal strategy
• TSP Roth In-Plan Conversion Guide: Convert Traditional to Roth within TSP
• FERS Retirement Calculator: See how TSP fits with your pension

Sources

• TSP.gov: Withdrawals in Retirement
• TSP.gov: Marriage and Spouse's Rights
• IRS: Required Minimum Distributions
• FedSmith: TSP Releases January 2026 Processing Schedule
• Federal Pension Advisors: TSP Rule of 55