Reg Jones Expert's View

It’s never too soon to think about when you should retire. Those who had the age and service to do that last year enjoyed a rare occurrence. The calendar year and the leave year ended on the same day – December 31. Anyone taking advantage of that walked right of the payroll onto the annuity roll. And they got a lump-sum payment for any unused annual leave that exceeded the annual carryover limit. How sweet was that?

Although that conjunction won’t happen again for over a decade, don’t despair. You can do almost as well this year. While the leave year doesn’t end until January 12, 2013, the preceding pay period ends on December 29, 2012. In other words you can retire with only a two-day gap between the end of your last pay period and when you are put on the annuity roll.

If you are a FERS employee, you must be off the rolls no later than the last day of the preceding month to be on the annuity roll in the following month. On the other hand, if you are a CSRS employee, you can retire up to the third day in a month and be on the annuity roll in that same month. While that can sometimes be an advantage, this year it isn’t. Not only would you lose 1/30 of that month’s annuity for every day you are still on the payroll, but you wouldn’t get credit for any annual or sick leave you would have earned during that pay period. You have to complete a pay period to get that. Partial credit is never given.

Is this the year for you to retire? Among the reasons it might be is the fact that for all practical purposes, your high-3 is locked in. Frozen salaries have seen to that. When you could count on a pay increase each and every year, there was an incentive to hang on. The higher your high-3 and the more years of service you had the bigger your annuity would be. Now you can only count on years of service (and maybe a within grade increase) to boost your annuity.

What considerations are going through your mind regarding timing your retirement? Let me know, and I’ll address them in an upcoming column.