What Dates Should You Consider to Retire On In 2020?

federal workers - Aubrey Lovegrove

What do those working in the federal government have in common with the end of the month and the start of a two-week leave time frame? These become very good retirement days when these land on the same day.

If you plan to retire in 2020, here are a few dates in the year when the end of the month is on or near the end of a leave period: January 31, February 29, and July 31.

Why is retirement at the end of the month valuable? The retirement benefits will begin on the first day of the month following your retirement. To put it another way, if you retire on the 1st, 6th, 15th, or 31st, your first retirement check will be the first day of the next month. Your last paycheck will cover you until your ultimate day on payroll.

The justification that the last day of the month is perfect to retire is that you can get your salary paid at the very end of the month and your pension will start on the first day of the next month.

For instance, if you ended up retiring on January 24, 2020, your standard income will be paid up until that closing business day. You will also collect the annual and sick leave for the first leave timetable of next year. Your first pension payment will be paid for February but will be dated March 1. If you decided to retire on January 31, then your pension will be paid up to that date, and you will be subject to the retirement benefit in February. The downside is that if you resign on January 17, you will lose a salary worth ten days, one paid holiday, and another accumulation of leave. Plus, your retirement would start on February 1, with the first payment being on March 1.

Since annual and sick leave only accrue when you fulfill the 80 hours of work for a pay period, the end of the leave periods is quite relevant. You won’t get a partial leave accrual if you resign in the middle of a pay period. You lose that benefit altogether. On the day you leave for retirement, you will be paid the entire amount of what you have accumulated for annual leave.

So, are there just three good retirement dates in 2020? Not at all. Any month’s last day will be beneficial because you’re going to be paid through the end of the month, and your retirement will begin to accrue the very next day in the new month.

There are some other dates that have their own advantages this year. If you leave on the last day of March, you will have gained leave time through the 6th phase, which closes on March 28. April 30 can work for those that have more of a flexible schedule as it is on a Thursday, but you would end up receiving your last leave accumulation if that is the case. If it is not flexible, you would lose the accrual but still receive your month’s pay, and you retirement would start on Friday. For most that plan to retire in May, it would probably be a few days before since the last day of the month ends on a weekend, but that still allows you to accrue your leave time, and you get paid the following Monday for your retirement. Now there are a few months that are similar to June, which the last day ends in the middle of a workweek. It is crucial to leave on the last day and not a few days earlier so that you can receive your leave time, but also so that you don’t miss a few days of your salary. Other months that are like this are August, September, October, and lastly, November.

Now, I have saved the best for last. December 31 is the best date because it is the final date of the leave year. If you did not take any leave that is about 208 hours of time that you can be paid out. Also if your position has a pay adjustment every year or at least for 2021, you will get those hours paid at the 2021 rate, except for 8 hours due to the 2021 leave year not starting up until January 3. Also, you end up leaving on the last day of the year, and your retirement accrues on the first of the year, which can be a sign of your new start.

TSP Thrift Modernization Act Start Date

Other Pauline Haren Articles

About Social Security Disability Benefits

Retirees and COLAs VS. Current Feds and Pay Increases

Should You Be Saving in A Traditional IRA or a Roth Account?

Important Things To Factor For Having Enough Money In Retirement

Leave a Reply