Listen up all you CSRS and FERS employees who are eligible to retire and are trying to make up your mind about which is the best date to do that. While there is no absolute best date to retire, some days are better than others. Let me explain.
For you FERS employees, the last date you can retire in 2013 and have the smallest gap between the day you leave and the day you are on the annuity roll is Saturday, December 28. For CSRS employees, it’s Friday, January 3. Here’s why that’s important.
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 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, especially if you have more than you can carry forward into the next leave year. For most agencies the 2013 leave year ends on January 11, 2014. 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 that will go into effect on the first pay period after January 1 (here I’m going on the pretty safe, but not completely safe, assumption that a pay raise will be paid in 2014, for the first time since 2010). For most agencies, that will be January 12. Yes, I know that the likely 2014 pay increase is only 1 percent. However, every penny counts when you are retiring. And if you have a lot of unused annual leave, those pennies will quickly turn into dollars.
In case you are wondering if you’ll be entitled to any retiree cost-of-living adjustment, the answer is: not right away. It’s already too late to get even part of the 1.5 percent that will be paid to retirees in January 2014. To receive a full COLA in January 2015, a CSRS employee would have had to retire no later than yesterday, December 3, 2013. If you retire now, i.e., from today up to January 3, you’d be eligible for 11/12ths of that COLA, and so on for subsequent months.
FERS employees would have needed to retire by last Saturday, November 30 to get a full 2015 COLA, and they similarly will have the 2015 COLA prorated according to the month, for retirements through next November. But for them there’s one more complication: With certain exceptions, if you are a FERS retiree, you won’t be eligible for any COLA payment until the January after you reach age 62. The exceptions are that FERS-covered law enforcement officers, firefighters, air traffic controllers, and disability retirees don’t have to wait until they are age 62. They are treated the same way as CSRS retirees when it comes to eligibility for a COLA.
Whatever you decide, I wish you good luck and, if you decide to retire, bon voyage!
