BEST DATES
To
Retire
THERE ARE IMPORTANT issues employees must consider when choosing a date to retire from federal service . Planning for retirement involves numerous financial , personal , and emotional considerations . As you go through the process of planning your retirement , you will also want to make sure you are retiring on the right day . There ’ s a lot to take into consideration and it can be confusing .
When it comes to retirement , you can retire any day you want once you become eligible . The information in this article is based on the fact that certain days are better than others when planning for a smooth retirement . It is okay if you retire on a weekend or holiday . It doesn ’ t have to be a workday at all . Your retirement date will be the date that you officially “ separate from service .”
Let ’ s first review when your FERS pension starts , which is on the first day of the month following the month in which you retire :
• If you retire on January 18th , your pension will start on February 1st .
• If you retire on March 5th , your pension will start on April 1st .
• If you retire on June 30th , your pension will start on July 1st .
The date that tends to be the most popular is date is the end of the year . In 2021 , that is Friday , December 31st .
Why is this such a great date ? Here are a few points to remember :
• If you don ’ t take any leave in the 26 leave periods of 2021 , plus you carry over 240 hours — or whatever balance you are entitled to keep in the new year — from 2020 , it is possible to be paid for 448 hours of unused annual leave in a lump sum payment .
• The payment is usually paid within six to eight weeks of your retirement date , so it won ’ t be taxable until 2022 .
• All of the lump sum leave payment will be paid at the 2022 pay rate .
WHAT YOU NEED TO KNOW ABOUT THE TREATMENT OF UNUSED ANNUAL LEAVE AT THE TIME OF RETIREMENT For any unused annual leave hours as of the day of retirement , all retiring employees are paid in a lump sum . Most agency payroll offices will make sure that the retiring employee ’ s lump sum payment for unused annual leave is deposited directly into the retiring employee ’ s bank account from 10 to 40 days following the employee ’ s retirement date .
It ’ s important to remember that most retiring employees will not receive their first full FERS annuity check until at least two months after they retire . Once retired , an annuitant receives “ interim ” annuity checks , not full annuity checks , equal to approximately 40 to 90 % of the full annuity check . The “ interim ” checks are sent out during the time the Office of Personnel Management ( OPM ) retirement office reviews the recently retired employee ’ s retirement file .
8 RETIREMENT FREEDOMFEDED . COM