Thinking about retiring from federal service next year? Here are the dates that are optimal for federal employees in 2024.
The general consensus among federal employees that the best day of the year to retire is the very last one – December 31st. This has to do with the accrual of annual leave and making sure feds get the highest lump-sum payment possible for this “use-or-lose” type of paid leave. Because 12/31 is such a popular date to start retirement, it leads to a yearly surge in OPM’s backlog of retirement claims. Similarly, the last day of a given month is also generally accepted to be a preferred date to begin one’s retirement from federal service. The end of the month is good because the first FERS or CSRS pension payment starts on the first day of the first month after the month in which a fed retires.
The accrual of leave stops for the year when the last two-week pay period of the previous year ends. So, if one were to retire on January 11, 2025, they could still reach their maximum amount of accrued annual leave and get an additional eight days of regular pay than if retiring on the December 31, 2024. However, the first retirement check from either CSRS or FERS will not arrive until the first of February.
Learn all about retirement planning for federal employees, both FERS and CSRS, at our no-cost webinar series
Besides the end of the year, or a given month, a federal employee should try to retire at the end of a two-week leave period because annual leave will only get accrued for the last leave period if the full 80 hours for that week were worked. Managing to retire on a Friday that is also at the end of the month and the end of a 2-week leave period is preferable, but there are only three such dates in 2024: May 31st, June 29th, and November 30th.
Pension money from voluntary retirement annuities begin on the first day of the month after the month in which the former federal employee reaches their given age and service requirements. And for CSRS and CSRS-offset workers, the retirement date can bleed into the first three days of the following month and still counts as if you retired at the end of the prior month. (For example, retiring February 3rd will have the same effect on leave and pay as retiring on January 31st and your CSRS income will start in the month of February. Waiting the three extra days is only a good idea if all three of those days are not weekends. This is because if two of the first three dates of the month fall on a weekend, this will reduce the first pension check by 1/10th (3/30ths) while only increasing the retiree’s last paycheck by just one day’s worth of salary. If the third of the month is a Wednesday, Thursday, or Friday, then waiting those extra days might be worth it.
Regardless of what day a federal employee chooses to retire, they will get credit for each day they worked, through the close of business, including holidays.
Best Dates for Federal Employees to Retire in 2024
Given all the information above, here are the best dates to retire next year:
- December 31, 2024
- May 31, 2024
- November 30, 2024
- January 11, 2025
Need help planning for retirement? Make sure you’re making the best decisions for your situation by meeting with one of fed-focused financial advisors in a no-cost virtual consultation-
Until Next Time,
You Might Also Enjoy This Podcast
**Written by Benjamin Derge, Financial Planner, ChFEBC℠ The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.
