While there isn't technically a limit on the number of 401(k) hardship withdrawals you're allowed in a year, you are limited by whether you qualify and whether you have enough money in your 401(k) to cover the qualifying hardship amount.
TSP Rules for Making an Age-591/2 Withdrawal
You can make up to four age-591/2 withdrawals per calendar year . entitled to keep based on your years of service) .
Loans. General purpose and primary residence loans continue to be available to you with some changes: You can have two outstanding TSP loans, but only one primary residence loan, per account. That means you can have two general purpose loans for each account, or one general purpose loan and one primary residence loan.
If you are a FERS participant, you will not receive Agency Matching Contributions. A hardship withdrawal cannot be repaid so your TSP account is permanently reduced by the amount of your withdrawal. Taking a loan may be a better option (see below). For more information, visit Financial Hardship In- Service Withdrawals.
There is no limit on the number of financial hardship withdrawals you can make; however, the TSP will not accept a financial hardship withdrawal request from an account for a period of 6 months after a financial hardship disbursement has been made from that account.
Required minimum distribution (RMD) changes
SECURE 2.0 increases the age you must begin taking RMDs from your TSP account. The start age for RMDs increased from 72 to 73 starting on January 1, 2023. The start age will further increase to 75 on January 1, 2033.
You can request to receive a total distribution of your entire TSP account balance if you want to take all of your money out of the TSP. Once processed, your TSP account balance will be $0, and you'll no longer be able to move money into the TSP from eligible plans.
The rule of 55 is an IRS provision that allows workers who leave their job for any reason to start taking penalty-free distributions from their current employer's retirement plan in or after the year they reach age 55.
In addition to making regular TSP contributions, you may also make TSP Catch-up contributions, if you are age 50 or older (or will be turning age 50 in 2025). The Catch-up amount is in addition to the regular TSP limit of $23,500.
You can only withdraw funds in which you are vested (i.e., funds you are entitled to keep) based on your years of service. The amount of your age-59 ½ withdrawal must be at least $1,000 or your entire vested account balance (even if it's less than $1,000).
Often, banks will let you withdraw up to $20,000 per day in person (where they can confirm your identity). Daily withdrawal limits at ATMs tend to be much lower, generally ranging from $300 to $1,000.
There is no such thing as too much money in the Thrift Savings Plan. If you want your TSP balance to be able to generate an inflation-indexed annual income of $10,000, most financial planners will suggest that you have a $250,000 balance at the time you retire.
You can receive no more than two hardship distributions during a plan year (calendar year for all Guideline 401(k) plans). The amount requested may not be more than the amount needed to relieve your financial need, but can include any amounts necessary to pay taxes or penalties reasonably anticipated.
You may need to supply supporting documentation of your hardship, including legal documents, invoices, and bills. Although the IRS does not approve hardship withdrawals from 401(k)s, you may still be audited. So, ensure all your ducks are in a row if you are permitted a 401(k) hardship withdrawal.
There are no definite limits on the number of hardship withdrawals an employee can take in a year, but they'll be limited to whether they'll be approved for one and whether their 401(k) has enough money to cover the withdrawal. Also, some 401(k) plans may have even stricter guidelines than the IRS.
A hardship withdrawal allows individuals to access funds from their TSP in situations of financial need. To qualify, the IRS stipulates that the withdrawal must be necessary to meet an “immediate and significant” financial need. Eligible expenses typically include: A recurring negative monthly cash flow situation.
rule. It's fairly simple. The idea is that a retiree can with- draw 4 percent of their retirement account each year, year af- ter year, and not run out of money. For example, if your TSP is $400,000, then the 4 percent rule says you could withdraw $16,000 per year ($1,333 per month) for the rest of your life.
Any payment from your traditional balance is considered taxable income since you've deferred paying taxes on this money . This includes your contributions, any agency or service contributions, and the earnings .
However, you can only withdraw the funds you are vested in. You must also withdraw at least $1,000 in an Age-Based Withdrawal, or your entire vested amount if it is less than $1,000. If you are 59 ½ and still working, you may not take more than four Age-Based Withdrawals per calendar year.
You can take a hardship withdrawal to meet an immediate financial need such as medical expenses, home repair after a natural disaster, or to avoid foreclosure on your home. When you request a hardship withdrawal, it can take 7 to 10 days on average to receive the money.
It generally takes between 7 to 10 business days to process your request once you've properly completed and submitted it. We disburse withdrawals each business day. You can check My Account at tsp.gov or call the ThriftLine to find out the status of your withdrawal request, including whether the payment has been made.
The 2024 IRS annual limit for regular TSP contributions is $23,000, and the TSP Catch-up annual contributions limit is $7,500. The Catch-up contributions may be made in addition to regular TSP contributions, if you are age 50 or older (or will be turning age 50 in 2024).
Submit your withdrawal forms directly to the TSP Service Office. To reach the Service Office, call the TSP ThriftLine at 1-TSP-YOU-FRST (1-877-968-3778) or the TDD at 1-TSP-THRIFT5 (1-877-847-4385). Outside the U.S. and Canada, please call 1-504-255-8777.
Questions From Our Readers
Generally, the limitation on withdrawing funds from an IRA is one withdrawal per year. In addition, taxes and penalties may be associated with taking money out before age 59 1/2.