It’s close to the end of the year, which means many federal employees are likely mulling over the question of when to retire.
While there’s no one best date for everyone, many federal workers choose a date at or near the end of the year. That makes sense from a financial viewpoint, especially if you want to maximize the lump-sum payment of your use-or-lose annual leave at retirement. Plus, the actual payment for your unused annual leave is likely to be made in the new year, when you could well be in a lower tax bracket.
But there are other considerations since the leave year ends at different dates each year. That brings into play different rules for those under the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS).
Under FERS, you have to be off the rolls for an entire month to receive an annuity payment for that month. If you want your annuity to start in November, for example, you would have to be off your agency’s rolls by Oct. 31. The actual payment likely wouldn’t be made until December.
CSRS employees can work through the third day of the month and still receive a pro-rated annuity for that month.
There are many other factors to consider, which is why NTEU recommends that you attend a pre-retirement counseling seminar at your agency. You should also plan to meet with your human resources office one year before you plan to retire to review your personnel folder to make sure it is complete and accurate.
No matter when you decide to retire, it’s important to remember that you can stay an NTEU member. The union works aggressively on retiree issues, including protecting federal retirement programs and addressing rising health care and prescription drug costs. NTEU is also working to secure new benefits for retirees, like the ability to use pretax income to pay for health care premiums. Retiree members also get the full range of NTEU member benefits, including money-saving discounts, NTEU publications and member-only access to this site. Learn more
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