Ask The Experts: Retirement

By Reg Jones

Best date to retire

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Q. I am a CSRS employee who plans to retire this year. I will have a large annual leave buyback, so I want to leave before the end of the 2013 leave year. I read one article that advised to retire Dec. 28 (the start of new pay period) and others that relay Jan. 3, 2014.

While I understand that the 3rd is the max to stay and get a retirement check the following month, i.e., February, am I correct that if you retire Dec. 28, you miss out on two full days of pay, i.e., the 30th and 31st? Or is the February check prorated to add those days?

Also, if OPM works applications by date of retirement, it seems that Jan. 1, 2014, is a better retirement effective date than Jan. 3, when everyone else is being told is the best day to retire. Does that make sense?

A. Dec. 28, 2013, is the end of a pay period, not the beginning of one. If you retire on the 28th, you’ll be on the annuity roll in January and entitled to a full month’s annuity. If you retire Jan. 3, you’ll earn one week’s more pay, but you’d only be entitled to 27/30ths of the January annuity payment. It’s up to you to decide which date is best, the 28th, 29th, 1st, 2nd or 3rd. If you retire after Dec. 28 but no later than Jan. 3, you wouldn’t be given credit for any annual or sick leave because you wouldn’t have completed a pay period when you retired.

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Comments

  1. Gary Walter Says:
    February 22nd, 2013 at 4:34 pm

    I am making the same decision. I agree with the questioner that financially it makes sense to retire on Jan 3. It is better to work and be paid Dec 30-31 than not be paid. Jan 1 is a paid holiday (and maybe some of Dec 31 as well), and Jan 2-3 will result in higher pay rate than the reduced rate of retirement. I certainly agree with Reg Jones in that I need to decide what is best for me based upon my personal situation.

    In terms of the the second question, I had 2 staff members retire at the end of 2012, one on Dec 29 and the other on Jan 3. Both received their OPM retirement packets the week of Feb 10 indicating that it does not make much difference. However, their retirement calculations were relatively simple for OPM-CSRS, little if any breaks in service, no military or Peace Corps service to consider, etc. And their HR retirement estimates before retirement were less than $5 off-and to the good. They are very happy retirees. I plan to join them on Jan 3, 2014.