Many individuals often relate retirement to finances. It all comes down to maximizing income while minimizing any potential losses. There is no specific best day to retire it is all about your personal preference and therefore the best day differs from one person to the next.
You can choose to retire whichever day you want, provided you meet the age and length of service requirements. For starters, what does retirement day mean? This can be termed as your last day as an employee. Retirement day and the effective day of retirement is basically the same thing, which is your last day on the list of federal employees. You should note that your last day at the office is different from your retirement day since being out of the office does not necessarily mean that you have retired.
You, however, wish to know the best days to retire regarding your finances. Here is a chart showing the preferable dates for retirement in 2019.
|-Dec .31, 2019||-Jan. 3, 2020|
|-The last day of any month||-The last day of any month or the first three days of a month|
If you are a CSRS folk, you should note that retiring on the first three days is not all advantageous. For example, if you choose to retire on a Saturday or Sunday, which are not included in your work schedules, then you will not be eligible for getting extra payment. However, choosing to retire on those days come with its benefits.
While your retirement day is based on your preferences, some benefits come with retiring at particular parts of the month or year. You have to consider if there are any potential losses that you could incur by retiring at a specific period first before making your final decision.
It is recommendable to retire at the end of any month or for CSRS, retire within the first days of the month. Why end month? It is best due to the provision that states that your annuity commences at the start of every month after retirement. For example, if you retire on April 30, your pension will commence on May 1. This means that there will be no gap between the date when you earn your salary and when you earn annuity.
If you choose to retire on April 6, for example, it means that you will not earn any salary or annuity for that month from 7 to 30 April because you will no longer be termed as an employee. You will start earning annuity on May 1 and nobody like that kind of gap.
This is different from CSRS’s standard rule. If you are in CSRS and you retire on the last day of the month or the first three days of any month, your annuity will commence on the retirement day. Those three days may seem insignificant, but they help you earn full pay, and you get to earn additional annuity.
The most recommendable retirement day for FERS employees is December 31, 2019. The date comes with the most significant financial benefit.
The best retirement for CSRS employees who wish to retire around the end of 2019 is January 3, 2020. You will be able to receive full pay through January 3 since you are still an employee till 3rd January. You will begin to accrue annuity on 4th January unlike when you retire on December 31 as you will out on three days of full pay.