Best Dates to Retire 2020

Your annual guide to choosing an optimal day to start the next phase of your life.

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What do the end of the month and the end of a two-week leave period have in common for those working in the federal government? If they fall on the same day, they become very good dates to retire. 

If you’re thinking about retiring next year, there are a few magic dates when the end of the month is also at or near the end of a leave period. They are:

Jan. 31

Feb. 29

July 31

Why is it important to retire at the end of the month? When you’re old enough to be eligible for retirement and have enough service to get an unreduced retirement benefit, the benefit will begin on the first day of the month after you retire. In other words, whether you retire on the 1st, 6th, 15th, or 31st of a month, your first retirement check will be for the month following your retirement date. Your last paycheck will provide compensation through the last day you’re on the payroll.

The reason why the last day of a month is great is that you can be paid your salary through the end of the month and your retirement will begin to accrue the first day of the following month.

For example, if you decide to retire on Jan. 17, 2020, your salary will be paid through close of business that day and you would accrue annual and sick leave for the first leave period of 2020. Your first retirement check will be paid for the month of February and will be dated March 1. If you chose to retire on Jan. 31, then you’ll be paid your salary through that day, and you’ll be entitled to the February retirement benefit. The difference is that if you retire on Jan. 17, you would forfeit ten days of salary, one paid holiday (Jan. 20) and another leave accrual. And your retirement would not officially start until Feb. 1, with the first annuity payment March 1.

The ends of leave periods are important because annual and sick leave only accrues if you complete the 80 hours of work (or whatever your scheduled tour of duty is) for a pay period. If you retire in the middle of a pay period, you will not get a partial leave accrual. You will be paid in a lump sum for the balance of annual leave in your account on the date of retirement.

So are there only three good dates to retire in 2020?  Absolutely not. The last day of any month works very well, because you’ll be paid through the end of the month and your retirement will begin to accrue the next day.

Here are some additional optimal dates for various reasons:

March 31: You’ll accrue leave through leave period 6, which ends March 28.

April 30: If you work a flexible work schedule, you might complete your work week at the close of business on this Thursday and accrue your last leave accrual. But if not, you will be paid your salary through April 30 and your retirement will start on May 1.

May 29: Unless Saturday and Sunday are paid work days for you, it’s fine to retire a couple of days before the last day of the month. (But it also would be fine to make your retirement effective on the 31st if you need a couple of days to make another month in the computation of your retirement.)

June 30: The difference between the end of June and the end of May or October is that June ends on a paid work day. If you choose to retire on Friday, June 26, you would forfeit the salary you could have earned on Monday, June 29 and Tuesday, June 30. Let’s say your annual salary is $80,000. Your gross pay for 16 hours would be more than $600. And your retirement will start  on July 1 either way. August, September, October and November have the same problem as June. If you want to retire at the end of the week, it won’t be the end of the month.

So what’s the best day of all?

Dec 31. For starters, it’s the end of the leave year. If you haven’t taken any leave in the 26 leave periods of 2020 and your carried over 240 hours from 2019, you can get paid for 448 hours of unused annual leave.

All but eight hours of the lump sum leave payment will be paid at the 2021 pay rate (assuming there is a general pay adjustment in 2021). In case you’re wondering, the reason why eight hours of the lump sum is paid at the 2020 pay rate is because the 2021 leave year doesn’t begin until Jan. 3.

If you can finish your 80 hours of work by Dec. 31, you will accrue annual and sick leave for leave period 26.

And it’s New Year’s Eve. What better day to end one chapter in your life and start another?

A final note: All of the above information applies to employees retiring under the Federal Employees Retirement System, the Civil Service Retirement System or CSRS Offset. But CSRS and Offset retirements start on the next day after your retirement date if the retirement is effective on the first, second or third days of the month. So the following are additional great dates for those retiring under CSRS or CSRS Offset:

April 3: The middle of a pay period, but the end of a work week. Your retirement will commence on April 4.

June 3: Monday through Wednesday that week are paid work days and your retirement will commence on Thursday, June 4.

July 3: A trifecta: End of the pay period, end of the week, and a holiday.

Sept. 3: Tuesday to Thursday are work days and your retirement will start on Friday, Sept. 4.

Jan. 1, 2021: Another trifecta: End of the leave year, end of the leave period, and a holiday—no need to come to work on your last day.

You can find all the best dates by downloading our special calendar at the link below.

Download the Best Dates to Retire Calendar