Rules Of Thumb For Deciding On Your Federal Retirement Date 

If you are getting ready for retirement after a career in Federal service, congratulations! While this is an exciting time, it can be difficult to decide the best date for retirement. This decision requires careful consideration and planning, as it can impact your retirement income, so be sure you are ready and have thought about it in depth before deciding.  

Unsure of where to start? That’s what our team at The Federal Educators are here for. Let’s explore a few of our rules of thumb for deciding on your Federal retirement date.  

Rule #1. Consider the End of the Month  

Whether you are retiring under the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS), if you work until the last day of the month, your retirement will begin the next day.  

For example, if you want to retire on September 30th, 2024, you would receive your first monthly retirement benefits for the entire month of October since your retirement begins the day after your retirement date.  

On the other hand, if you retire on October 3rd, which is a Monday, your first monthly benefit would be for November. That would leave you without income for the rest of October.  

The above applies unless you retire under the CSRS, which allows you to retire on the first, second, or third day of the month. Your retirement would begin the next day and would be prorated based on which day you pick.   

Rule #2. Consider Bi-Weekly Pay Periods 

If you work less than a full pay period, you won’t accrue leave for that period. Remember, the annual leave that you have accumulated by the time you retire from federal service will be considered unpaid compensation. 

Once you have been taken off of your agency’s payroll, their HR department will calculate the value of the hours of annual leave that you have remaining and will then issue a lump sum payment.  

Note: For most federal employees, the 2023 leave ends on Saturday, January 13th, 2024.  

Rule #3. Think About Lump Sum Payments  

For employees who have an abundance of annual leave at retirement, a lump sum payment can act as a design-your-own buyout and provide some cash while your retirement is processing. Although taxes will be withheld, you won’t have to make retirement contributions, the Thrift Savings Plan (TSP), or any insurance premiums from this payment.  

Note: Most Federal employees can carry over 240 hours of annual leave into the new year.  

Rule #4. There are Exceptions 

Remember, the rules above do not apply to every situation. Also, it is important to note that disability, survivor benefits, and discontinued service retirement payments will commence on a different date than what we described above.  

Also, Federal employees such as law enforcement officers, air traffic controllers, and firefighters are subject to mandatory retirement and their retirement benefits will begin the day after they retire.  

Remember, you don’t have to follow these rules, they are only helpful guidelines to help you choose a date to retire. Retire when it feels right to you!  

Contact The Federal Educators 

Need help deciding when to retire or wading through all you need to know about Federal retirement? Our team at The Federal Educators is here to help. We will walk you through everything you need to know and help you make the best decision for you and your family.  

Ready to get started? Contact us today at (813) 755-7037 for a consultation.