Q: Could you explain the rationale for the best dates to retire? For example why is Dec 28 better than Dec 31 for 2014?
A: I’m sorry, but I can’t explain why Dec. 28 would be a better date to retire in 2014 than Dec. 31 because I don’t agree with that statement.
In my opinion, the rationale behind “best dates to retire” should be to maximize income. That usually means picking a retirement date that provides for the most income in terms of both salary and annuity.
To that end, I would say that Dec. 31 would be a better retirement date than Dec. 28 because it would provide receipt of three additional days of full pay. Retiring on Dec. 28 would result in those three days being uncompensated; that is, no salary (because the individual is retired) and no annuity (because the annuity will not commence until Jan. 1, 2015).
For CSRS and CSRS Offset employees, I would go further and say that they might want to retire effective Jan. 1 or 2, 2015, and garner one or two more days of full pay. (An exception allows their annuities to commence the day after they retire if they retire in the first three days of a month.)
One pretty firm rule is that it always pays to work longer. While a few additional days might not increase your retirement annuity, at least you would have received full pay for those days.