As you go through the process of planning your retirement, you will also want to make sure you are retiring on the right day. There’s a lot to take into consideration and it can be confusing.

Once you become eligible, you can retire any day you want. The information in this article is based on the fact that certain days are better than others when planning for a smooth retirement.

Let’s first review when your FERS pension starts, which is on the first day of the month following the month in which you retire:

• If you retire on January 18th, your pension will start on February 1st.
• If you retire on March 5th, your pension will start on April 1st.
• If you retire on June 30th, your pension will start on July 1st.

The date that tends to be the most popular date is the end of the year. In 2021, that is Friday, December 31st.

Why is it a great date? Here are a few points to remember:

• If you don’t take any leave in the 26 leave periods of 2021, plus you carry over 240 hours—or whatever balance you are entitled to keep in the new year—from 2020, it is possible to be paid for 448 hours of unused annual leave in a lump sum payment.
• The payment is usually paid within six to eight weeks of your retirement date, so it won’t be taxable until 2022.
• All of the lump sum leave payment will be paid at the 2022 pay rate.

Other factors you need to know before you choose a retirement date include how unused sick leave and annual leave is treated at retirement. To learn more, download the latest issue of our free magazine.