I know it’s late in the year to bring this up again. However, for those of you who are eligible to retire and are still sitting on the fence, I once again want to address the oft-asked question, “What’s the best date to retire?” While there is no absolute best date to retire, some days are better than others, especially at the end of the year. Let me explain why.
For FERS employees, the last date you can retire in 2015 and have the smallest gap between the day you leave and the day you are on the annuity roll is Thursday, December 31. For CSRS employees, it’s Sunday, January 3. Not going beyond those dates is important because the month you get on the annuity roll determines when you’ll be entitled to your first annuity payment.
If you are a FERS employee who retires at the end of December, you’ll be on the annuity roll in January. If you are a CSRS employee who waits until January 1, 2 or 3, you’ll still be on the annuity roll in January; however, for every one of those three days you delay retiring, your first month’s annuity payment will be reduced by 1/30th. Whether you are a CSRS or FERS retiree, your first annuity payment will be due on February 1.
Another plus to leaving at the end of the year is your entitlement to a lump-sum payment for unused annual leave. That’s good news, especially if you have more hours than you can carry into the next leave year. For most agencies the 2015 leave year ends on January 09, 2016. Because unused annual leave is projected forward, the closer you retire to the date on which the new leave year begins, the more of those hours will be paid at the higher hourly rate.
If you are a CSRS employee, you are entitled to cost-of-living adjustments (COLAs) to your annuity regardless of the age at which you retire. On the other hand, if you are a FERS employee, you won’t be entitled to your first COLA until you reach age 62.
If you are a FERS retiree, you also won’t be entitled to a COLA on your special retirement supplement. However, that doesn’t mean that the SRS is worthless. It helps to bridge the gap between when you retire and age 62, when the SRS ends and you become eligible for a Social Security benefit, However, be aware. While you are receiving the SRS, it will be reduced or eliminated if you have earnings from wages or self employment that exceed the annual Social Security earnings limit. It can only be restored if your earnings fall below the earnings limit. In 2016, the earnings limit is $15,720, the same as it was in 2015.
Is now a good time to retire? Only you know the answer to that question.