Thrift Savings Plan Emergency Withdrawal Act

Official: Thrift Savings Plan Emergency Withdrawal Act of 2025

IntroducedDecember 23, 2025

Taxation

Why This Matters

This bill helps federal employees access their retirement savings without penalties after leaving their jobs, making it easier for them to manage their finances during transitions.

If you are a federal employee leaving your job, you can access your retirement savings without penalties and manage your taxes better.

Affects: Federal employees who separate from government service and have Thrift Savings Plans will benefit from this bill.

What changes is this bill making?

1. This bill allows federal employees who leave their jobs to withdraw money from their Thrift Savings Plans without penalties. 2. Employees can spread the taxable income from these withdrawals over three years. 3. The total amount they can withdraw penalty-free is capped at $100,000. 4. Individuals can repay the withdrawn amount to their retirement plans within three years. 5. The bill applies to withdrawals made after January 20, 2025.

Who is affected?

Federal employees who separate from government service and have Thrift Savings Plans will benefit from this bill.

Read full document