What is the best date to retire on?

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What are some of the key factors should I consider when picking a retirement date?

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Asked on July 22, 2016 8:07 pm
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Getting on the annuity roll

The month you get on the annuity roll affects the point at which you’ll get your first annuity check. FERS employees have to retire no later than December 31 to be on the annuity roll in January; CSRS employees can retire as late as January 3 and be on the roll in January. However, for every day they delay after December 31, their January annuity payment will be reduced by 1/30th. In either case, the first payment will be due on February 1.

Cost-of-living adjustments

COLAs are payable on January 1 of the year following your retirement. To receive a full 2009 COLA, a CSRS employee would have needed to retire no later than December 3. If you retire now, i.e., from today up to January 3, you’d be eligible for 11/12ths of the COLA on January 1, 2009. With certain exceptions, if you are a FERS retiree, you won’t be eligible for your first COLA until you reach age 62, regardless of when you retire. FERS-covered law enforcement officers, firefighters, air traffic controllers, and disability retirees do not have to wait until they are age 62. They are treated the same way as CSRS retirees when it comes to eligibility for a COLA.

Unused annual leave

If you have more unused annual leave than you can carry forward into the next leave year, you’ll want to retire before the current leave year ends. For most agencies that will be January 5, 2008. Because unused annual leave is paid to you in a lump sum, the closer you retire to the date on which the new leave year begins, the more of those hours will be paid at the new, higher hourly rate that will go into effect on the first pay period after January 1. For most agencies, that will be January 6.

Restored annual leave

A few of you may have unused annual leave that was restored to your account because your agency had to cancel your end-of-year leave plans. If that’s the case, the cutoff date for using it is December 31, not the end of the leave year. Keep that in mind when choosing your date to retire.

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Posted by admin (Questions: 0, Answers: 2)
Answered on July 22, 2016 8:09 pm