Expert's View

Year after year, I get the same question. What’s the best date to retire? That was an easy question to answer in 2011. The calendar year and the leave year ended on the same day – December 31. Anyone who took advantage of that occurrence retired on December 31 and went on the annuity roll on January 1. Life was good!

Unfortunately, that won’t happen again until 2021. Instead, you’re going to have to deal with a 2013 leave year that ends on January 11, 2014.Under that circumstance, how can you maximize your retirement benefits? Well, the answer depends on which retirement system you are in.

If you are a FERS employee, you have retire no later than the last day of a month to be on the annuity roll in the following month. So, you could retire on December 31 and be on the annuity roll on January 1. If you are a CSRS employee, you could retire up to the third day in the month and be on the annuity roll in that same month.So, you could retire up to January 3 and still be on the annuity roll in January. However, if you did that you would lose 1/30 of that month’s annuity for every day you are still on the payroll.

And there’s one more factor to consider. For most agencies, the last pay period in 2013 ends on December 28. If you work past that date to December 31 (FERS) or January 1,2 or 3 (CSRS), you’ll earn some additional salary, but you won’t get credit for any annual or sick leave you would have earned during those few days. Partial credit is never given. You have to complete a pay period to get that. Still, because the leave year doesn’t end until January 11, 2014, you’ll get a lump-sum payment for all your unused annual leave, including any leave that exceeds the annual carryover limit.

Is this the year for you to retire? One good reason is 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 and potentially a 1 percent raise in January at best) to boost your annuity.