Learn How to Use TSP-75 Age-Based Withdrawal Form

learn how to use TSP-75 formAt retirement you will be faced with some decisions that must be made. One of those decisions will be deciding what withdrawals to make from your Thrift Savings Plan (TSP).

In order to complete TSP-75, Age Based In- Service Withdrawal, you must be age 59 ½ or older and still working as a federal employee.

Age-Based Withdrawal Rules

  • Can only withdraw vested funds based on years of service. Typically the vesting period is 3 years in order to claim your TSP. However, for some positions the vesting period is 2 years.
  • Withdrawal must be at least $1,000 or entire vested account balance (even if it’s less than $1,000)
  • Allowed only one age-based withdrawal during federal employment. If you have two TSP accounts (i.e. a civilian TSP and military TSP), you can only make an age-based withdrawal from the TSP account associated with your active employment. If both your TSP accounts are associated with active federal employment, then you can make an age-based withdrawal from both your civilian TSP and military TSP.
  • TSP-75 allows you to make a partial withdrawal while still working. Once you have made this type of withdrawal, one time only, it will no longer be any good to you or available for a second use. If you are making this age-based in-service withdrawal for a particular purchase (i.e. a boat), you will not be able to do that again.

Why would someone complete this form?

Let’s assume you are 60 years old and you’re ready to purchase a boat before you retire. The particular boat you are considering buying costs $20,000. If your money comes from a “tax-deferred” account (money that you owe taxes on), you will owe taxes upon withdrawal.

  • Using this form, you could use TSP funds to purchase the boat. Keep in mind that the federal government will take out a mandatory 20% federal withholding.
  • Make sure that your percentages match when completing this form. If you want this withdrawal to help you to reach your goal, then it is important to factor in the 20% mandatory federal tax withholding.

Let’s look at a few sections on this form.

Section I: Information about You – This section asks for some general information such as your name, account number, date of birth, etc.

Section II: Withdrawal Request – This is the amount that you may request from the TSP. You must request at least $1,000

Section III: Transfer Election – You may elect to transfer your age-based withdrawal directly to an IRA. If you have a Roth TSP account, you may also transfer those retirement savings into a Roth IRA.

TSP-75 Section 3

Section IX: Your Transfer Election for Traditional Balance – Line 29 represents the amount in percentage that you would like TSP to remove from your account in order to transfer your retirement savings into your IRA.

TSP-75 Section IX

Receiving Your Age-Based Withdrawal

Upon completion of your TSP-75 age-based withdrawal form online, TSP will mail your check to the address in your TSP account record. If you are making a paper withdrawal request, your TSP withdrawal may be deposited directly into a checking or savings account. If a portion of your TSP is being transferred, TSP will mail your age-based withdrawal check to your IRA or employer plan.

If at the time of your submission of an age-based withdrawal request, you have pending applications for another in-service withdrawal or a TSP loan, then your request will result in a decline.

Under current law, upon receipt of your request, it may take weeks for TSP to send your check. As forms are updated with the TSP Modernization Act, we will update this blog or our records.