After you meet the age and years of creditable service requirements to retire with an immediate annuity (pension), it’s time to select a retirement date. Before you make a final decision, there are a few things you need to know.
Why The Last Day Of The Month Is Important
Although you can retire on any day of the week, it’s important to understand the rules that govern when your annuity begins. Under FERS, your retirement date is set as the first day of the month after you retire. To be on the annuity roll in the following month, you need to retire no later than the last day of the month, no matter what day of the week that may fall on. Otherwise you’ll have to wait longer for your first annuity (pension) check.
For example, If you retire on Saturday, June 29, 2024, your retirement date is July 1, 2024, and your annuity payments begin on August 1, 2024. If you wait until mid-July to retire, your retirement date would be August 1, 2024 which means your annuity payments wouldn’t begin until September 1, 2024.
“The lump-sum payment can help cover your living expenses while you’re waiting for your first pension check.”
The Value Of Your Accrued Annual Leave
It’s important to understand that your accrued annual leave does not count toward retirement eligibility or the calculation of your annuity. However, with strategic planning you can turn it into a sizable lump-sum payment when you retire. Generally, the annual leave you can carry over from one year to the next is 240 hours. Any hours above this maximum must be used before the end of the leave year or you’ll lose it.
As long as you retire before the new leave year begins, you won’t lose the annual leave that is above the maximum carry-over limit. For example, Tuesday, Dec. 31, 2024, is a good date to retire to maximize your lump-sum payment. You would have all the accruals for 2024 plus carryover hours from 2023. The lump-sum payment can help cover your living expenses while you’re waiting for your first pension check.
A Quick Note About The Value Of Unused Sick Leave
Though unused sick leave cannot be used to make you eligible for retirement, once you meet the age and service requirements for an immediate FERS annuity (pension), your accumulated, unused sick leave is added to your years of creditable service to calculate the amount of your monthly annuity.
Before you select your retirement date, connect with an FRC® trained advisor who can help ensure you get all the federal benefits you deserve when you retire.
*www.opm.gov/retirement-center/fers-information/eligibility/#Immediate
