What is the Best Date to Retire?

By on November 15, 2012 in Current Events, Retirement with 16 Comments

“Best”?  What is meant by this?

If you are thinking of a new, relaxed life style, then the best retirement date is as soon as you are financially able and psychologically prepared.  Period.  However, if you are concerned about the monetary nuances, then there are a number of best dates, each a bit better than the previous.

For example, let’s say the hypothetical situation is that the new year, for pay purposes, starts on January 3.  Note:

Retirement Date Reason
December 8 First date eligible to retire.
December 20 Last day of pay period – receive full credit for 4 hours sick leave and 8 hours annual leave.
December 31 Receive full credit for current year earnings in calculation of annuity supplement. (Any earlier retirement date would result in -0- credit.) Also, first annuity payment will be for January.
January 3 Lump sum for accumulated annual leave paid at new rate, assuming a general salary increase! Also, more sick and annual leave credit. However, January retirement means no annuity until February.
January 8 Receive credit in annuity calculation for one more month of service. Slightly larger annuity.

In most cases, the longer you wait to retire, the more financial advantages you will accrue.  Do you need them?  If not, just retire as soon as you can, and enjoy yourself!  I’m sure we all know of cases where employees could have retired sooner, but waited and waited…  and then one day “Poor Joe.  He was planning on retiring real soon.”

My recommendation is, generally, if you are financially able and psychologically prepared, don’t dwell too much on the above incremental gains.  Just go!

Calculate your annuity at my site:  fedbens.us

© 2016 Robert F. Benson. All rights reserved. This article may not be reproduced without express written consent from Robert F. Benson.

About the Author

Robert Benson served 35 years in various Federal agencies, as both a management analyst and IT specialist. He is a graduate of Northwestern University.

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  1. In Limbo says:

    Does anyone have any insight into “Phased Retirement” and when it will be implemented?  I’m holding off turning in my retirement paperwork not knowing if you would submit Phased Retirement paperwork along with, or in lieu of, retirement paperwork.

  2. billw1952 says:

    I’m confused on your Dec 31 retirement reason, last sentence, “Also, first annuity payment will be for January”, as compared to your Jan 3 reason, last sentence, “…January retirement means no annuity until February.  Doesn’t both scenarios provide for an annuity payment beginning February, albeit Jan 3 retirement will be prorated? 

    • Japygid says:

      A January 3rd retirement would get you annuity payment for January if, and only if, you were CSRS.  And yes, it would be prorated to allow for the “missing” days.

      For FERS, a January 3rd retirement would yield a first payment for the month of February.   

  3. oldfsmama says:

    yeah like if you can EVER get your final determination!  I retired Dec 31, 2011 and am STILL waiting for my final determination! Inexcuseable if you ask me!

  4. Japygid says:

    CLARIFICATION.   Although there is no general raise (yet) for 2013, readers should be advised that if the effective date for a general raise falls after your retirement but during the interval covered by your annual leave, your lump sum will still be calculated at the new, higher rate. 

  5. Guest_1969 says:

    The next day I win or share in the Power Ball or Mega Million drawing.

  6. Guest_1969 says:

    The next day I win or share either the Power Ball or Mega Million drawing.

  7. Erica Sterling says:

    This information is inaccurate for 2012.  Dec 29 is the end of pay period 26 for most feds.  We are not recieving a pay adjustment in January of 2013, so the hourly rate that is used to compute the lump sum annual leave payment will not change.  What does the Juanuary 8th date have to do with getting another month of service if you don’t know the employee’s Service Computation Date? Lastly, the earnings for the year of separation are not used in the annuity supplement computaiton.

    • Japygid says:

      The year I used was hypothetical, as I mentioned in the article.  The 8th of January (and the 8th of EVERY month) is important because it is the date of his service comp date; that is, he started on the 8th of (whatever) and on the 8th of each month he racks up another month of service credit.

      It is true earnings in the year of separation are not used in the calculation of the annuity supplement.  This is why I had him select December 31 as his retirement date.  He is credited with working a full day on December 31 – thus he worked the entire year.  December 30th would not have acccomplished this for him.

  8. Japygid says:

    CLARIFICATION.  It is true that a FERS employee receives no annuity payment for the month in which he retires, but if a CSRS employee retires on the first, second, or third of a given month, he will receive a pro-rated payment for the month.

    Sorry I did not make the above clear in my article.

    • LJW65 says:

      I am a FERS employee and am retiring 01/12/13 to take advantage of the extra pay period.  I am under the impression I will not receive my annuity until March.  Is that correct?  Thanks!

      • Japygid says:

        Yes.  On/about March 1 you should receive a payment for February.  You know, of course, it will be estimated, and it will be less than whatever the final determination is.

        Good luck!

        • LJW65 says:

          Yes, I do understand the payment will be estimated.  I find it ludicrous that with all the electronic capabilities of the government that the retirement process is so archaic.  I can go on-line to start my Social Security but I will have to wait for months to receive my full payment, and unfortunately I will not receive a payment in the future to catch up what I was shorted from the beginning. 

          Even though I am under the FERS retirement program, and would have retired on 12/31/12, I decided to wait until the 12th of January to take advantage of the extra 8 hours annual leave for the lump sum not to mention one more payment into my TSP. 

          Thank you for your reply, I appreciate your time.

        • oldfsmama says:

          yeah if you can ever get the final determination… like I retired Dec 31 2011, still no final determination…inexcuseable if you ask me

    • Lee Beck says:

      I’m CSRS and retiring January 3.  I understand that I’ll ultimately receive a prorated payment for January but that it will be received in February.  I’ve been told that even though there are 27 pay periods in 2012 that I’ll get paid for only 208 hours annual leave maximum for 2012, even though I haven’t taken any AL for the year.   Is any of this incorrect?

  9. wm98 says:

    Psychologically prepared is just one major key factor when it comes to retirement.  In my discussions with Federal retirees a comment I often hear is that they wished they would’ve stayed longer. It would be beneficial to retirees if the Federal agencies had retirement counselors to assist individuals in preparing for the transition, whereby the retiree could discuss the financial and psychological aspects of retirement, and make a clear conscious decision based on the information acquired in counseling.

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