As you might expect, employees often ask me to tell them the best date to retire. My standard answer is, "It all depends." If pressed, I point out that there are pluses and minuses to any date they might choose.

However, the calendar has changed the way I look at the matter. Starting in 2008, the stars have aligned in such a way that there actually are some best dates to retire, as long as you want to do it at the end of the year. Let me illustrate.

CSRS employees

For 2008, the final pay period and the leave year ended on Saturday, January 3, 2009. Because of that, a lot of CSRS employees retired then. As you probably know, CSRS employees can retire on any of the first three days in a month and be on the annuity roll in that same month.

In exchange for giving up 1/30th of their first month’s annuity for each of those three days they weren’t on the annuity roll, these retirees gained the sick and annual leave they earned during that pay period and got paid for any annual leave that would have exceeded the carryover limit to the new leave year, the so-called "use of lose" leave. And those hours were paid at the higher rate that went into effect beginning with the first pay period on or after January 1.

In 2009, the final pay period and the leave year will end on Saturday, January 2, 2010. Therefore, any CSRS employee who retires on that date will have a smaller annuity reduction for that first month and still gain all the advantages enjoyed by those who retired on January 3, 2009. Better still, in 2010, the final pay period and leave year will end on Saturday, January 1, 2011. In case you were wondering, you can retire on a holiday.

FERS employees

Because FERS employees have to retire no later than the last day in a month to be on the annuity roll in the following month, they haven’t enjoyed the same benefit that CRSRS employees have. But they will in 2011. That’s when the last pay period and the leave year end on December 31, 2011. On that date, any FERS employee (or CSRS employee for that matter) can retire and be on the annuity roll in the following month. No one retiring on December 31, 2011 will lose a day of pay or a day of his annuity. It doesn’t get any better than that!