Expert's View

It’s that time of year again: The time when employees who have the age and service needed to retire begin thinking hard about doing so. And that goes double for those of you who have been offered an opportunity to retire early.

However, this year mental gears are grinding faster than ever because of a rare conjunction of the end of the calendar year with the end of the leave year. Both end on December 31. That won’t happen again for more than a decade.

As a result, FERS and CSRS employees are offered a rare opportunity. If you are a FERS employee, you have to retire no later than the end of a month to be on the payroll in the following month. And, while a CSRS employee can retire up to the third day of a month and be on the annuity roll in that month, if you do so, you’ll lose 1/30 of that month’s annuity for every day you are still on the payroll. How sweet it is to walk off the payroll onto an annuity without a break. At 11:59 PM on December 31, you’ll be an employee; at midnight, you’ll be a retiree.

And that’s not the only benefit of retiring on December 31. Because you’ll be retiring at the end of a pay period, you’ll get credit for any annual and sick leave you earned during that period.

And here’s another. You’ll be able to receive a lump-sum payment for all your unused annual leave, including the “use or lose” portion that would be forfeited if you waited until the start of the new leave year.

Now, if this had been a normal year, there’d be one more benefit that would have you breaking out the noise makers and really celebrating. That benefit is based on the fact that your annual leave is projected forward as if you were still on the payroll. As a result, any hours of annual leave that fall on days after an annual pay raise goes into effect are paid at the new, higher rate. Unfortunately, the pay freeze has put that benefit on hold.

So, is this the year for you to kiss Uncle Sugar goodbye? Let me know.