Alright, fellow feds! Let me spill the beans on the million-dollar question that’s probably keeping you up at night as you approach your golden years – when exactly should you hang up your federal employee hat?
As a financial advisor who’s helped hundreds of federal employees transition to retirement, I can tell you that timing is everything when it comes to maximizing your benefits Let’s dive into the best months to retire from federal service in 2025 and beyond.
The Strategic Importance of Your Retirement Date
Choosing the right retirement date isn’t just about picking your favorite month or when you’ve finally had enough of your supervisor’s antics. It’s a strategic decision that can literally put thousands of extra dollars in your pocket.
Here’s why timing matters:
- Annual Leave Payout – Retiring at the end of a pay period ensures you receive credit for all accrued annual leave
- FERS Pension Start Date – Your pension begins on the first day of the month following retirement
- Tax Considerations – The month you retire can affect which tax year certain benefits fall into
- Leave Year Considerations – Maximizing leave accrual before retirement
December: The Reigning Champion
I would say December is the “best month” if I had to pick one. A lot of people say that December 31 is the best date for federal workers to retire, and there are good reasons for this.
- Maximum Leave Carryover – You’ll have used up your “use or lose” leave and can cash out the maximum amount
- Clean Tax Break – Your retirement benefits will begin in a new tax year
- TSP Considerations – Allows for a clean transition in your Thrift Savings Plan strategy
According to the Federal Pension Advisors, one of the best times to retire is December 31, 2025. This is because it is the last day of the month and the start of the leave year.
January: The Worthy Alternative
January can be a smart choice too, particularly early January. For 2025, January 11th is highlighted as an excellent option as it falls at the end of a pay period and the leave year.
This timing allows you to:
- Start the new year with a clean slate
- Potentially lower your tax burden if you expect a large annual leave payout
- Begin collecting your pension almost immediately
Other Strategic Months for 2025-2030
According to multiple sources, these dates represent optimal retirement timing over the next several years:
2025:
- May 31, 2025 – End of a pay period and end of month
- November 29, 2025 – End of pay period and near end of month
- December 31, 2025 – End of month and leave year
2026:
- January 10, 2026 – End of pay period and leave year
- May 30/31, 2026 – End of pay period and month
- October 31, 2026 – End of pay period and month
- December 31, 2026 – End of month and leave year
2027-2030:
- 2027: October 30th is optimal
- 2028: April 29th and September 30th
- 2029: March 31st and September 29th
- 2030: March 30th and August 31st
Why These Dates Work Best
The ideal retirement dates typically share two key characteristics:
-
They fall at the end of a pay period (usually a Saturday) – This ensures you get credit for all accrued annual leave during that final period. If you retire before the end of a pay period, you could forfeit the 8 hours of annual leave earned in that period.
-
They fall at the end of a month – This guarantees your FERS pension begins on the first day of the following month, minimizing any gap between your final paycheck and your first pension payment.
For example, if you retired on Friday, November 28th, your pension would still start on December 1st. But if you retired just one day earlier on November 27th, your pension wouldn’t start until January 1st – that’s a whole month’s pension you’d miss!
The End-of-Year Advantage
The end of the year (December 31st) offers a unique advantage for federal retirees. While it may not always coincide with the end of a pay period, retiring on December 31st ensures:
- Your pension begins on January 1st
- Your lump sum payout for unused annual leave falls into the next tax year
- This can be beneficial since your overall income will likely be lower in retirement, potentially reducing the tax burden on that payout
Calculating What’s at Stake
Wondering exactly how much money you might leave on the table by picking the wrong date? Here’s a quick calculation:
- Take your annual salary
- Divide by 2,087 (standard full-time hours)
- Multiply by 8 (leave hours typically accrued each pay period)
That’s what you could lose by not retiring at the end of a pay period. For someone making $100,000 annually, that’s nearly $400 in lost benefits!
Other Factors to Consider
While timing is crucial, don’t forget these other important considerations:
- Social Security benefits – If eligible, consider coordinating with your Full Retirement Age
- Thrift Savings Plan (TSP) – How will your retirement date affect your investment strategy?
- Federal Employees Health Benefits (FEHB) – Ensure continuity of coverage during transition
- Financial readiness – Do you have adequate savings to bridge any gaps in income?
What If You Can’t Wait?
Listen, I get it – sometimes life happens and you just can’t stick around until that “perfect” date. If you have significant savings and aren’t concerned about a small gap in income, you could consider simply retiring at the end of any pay period. This gives you more flexibility since there are 26-27 pay periods each year.
The Bottom Line
When it comes to federal retirement, December typically reigns supreme as the best month to retire, with December 31st being the golden date for many. However, the “best” month ultimately depends on your personal circumstances, financial situation, and retirement goals.
For 2025, the top contenders are:
- December 31, 2025
- January 11, 2025
- May 31, 2025
- November 29, 2025
Remember, the difference between a good retirement date and a great one could mean thousands of dollars in your pocket. It’s worth taking the time to get it right!
If you need help figuring out the best time to retire, you might want to talk to a financial advisor who specializes in federal benefits. We’re here to help you make these hard choices and make the most of the benefits you’ve earned by working for the government for so long.
Final Thoughts
Your retirement date is one of the most important financial decisions you’ll make as a federal employee. By understanding how different months impact your benefits and strategically choosing when to retire, you can maximize your hard-earned benefits and set yourself up for a comfortable, financially secure retirement.
Take the time to plan carefully, consider all factors, and when in doubt, consult with a professional who specializes in federal retirement benefits. You’ve earned every penny of your federal retirement – make sure you get it all!
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There’s so much to think about when it comes to retirement. One often-overlooked detail is choosing the right retirement date. If you work for the Federal Employee Retirement System (FERS), the date you retire can have a big effect on your finances during this time. In this post, we’ll help you identify the best dates to retire in 2025.
Is There Actually a Best Date to Retire?
As a FERS employee, your retirement date is set at the first day of the month after you choose to retire. You’ll then receive your first FERS annuity check on the first day of the following month.
For example: Paul chooses to retire on May 15. On July 1, he gets his first FERS annuity payment. His retirement date is June 1.
This will leave a gap between your last working paycheck and your first annuity payment. Strategizing on the right date can help minimize this gap and its effects on your cash flow.
Best Dates for Federal Employees to Retire in 2025
FAQ
What is the best date for a FERS employee to retire?
Ideally, you want to retire on the final day of the pay period to get credit for all accrued annual leave. Retiring too early in a pay period could result in forfeiting the 8 hours of annual leave earned in that final pay period. Saturdays matter here, even though they are not a business day.
Is it better to retire in December or January?
Neither December nor January is definitively better for retirement, as the optimal month depends on your personal financial situation, company policies, and personal preference. If you retire in December, you can make the most of your year-end contributions and might even get a bonus. If you retire in January, on the other hand, you might be able to get a lower tax rate on lump-sum payouts like bonuses or unused leave because they will be taxed the following year.
What is the best time to retire from the federal government in 2025?
December 31 is always a great date because it creates a clean start for the following year from a financial perspective and allows for maxing out of annual leave and sick time. These are the best dates for federal employees to retire in 2025: January 11. May 31.
Is it better to retire at the beginning or end of the month?
Should you retire at the beginning or end of the month? Usually, the last day of the month is the best time to retire. This enables you to collect all your paychecks during this period. You might also want to get any holiday pay that your employer might be giving you for that month.
When is the best time to retire?
You’re eligible to retire, and you’ve confirmed it’s financially feasible. Now, the only question is choosing the optimal retirement date. For federal employees, December 31st is often ideal, and this is not only for fers best dates to retire 2025,but every time as it allows you to carry over the maximum amount of annual leave.
What is the best day of the month to retire from federal service?
What is the best day of the month to retire from federal service? In general, the best time of the year for a FERS-covered employees to retire is close to or ideally at the end of the leave year, which is sometime in very late December to early January, anytime between December 31 and January 13, inclusive.
When is the best time to retire 2025?
For federal employees, December 31st is often ideal, and this is not only for fers best dates to retire 2025,but every time as it allows you to carry over the maximum amount of annual leave. This timing also explains the surge of retirement applications the OPM receives at the start of each year.
When should federal employees retire?
So, without further ado, here are the most optimal dates for Feds to retire in 2025, 2026, 2027, 2028, 2029, and 2030. 2025: 2026: 2027: 2028: 2029: 2030: Check out our webinars for federal employees!
How do I choose a retirement date?
Let’s go over the biggest factors you need to consider when picking a retirement date. Your Federal Employee Retirement System (FERS) pension is payable the month after you retire. For example, if you retire January 1st, your pension is payable February 1st. You would have to wait a whole month for your pension to be payable.
Should you retire at the end of a month?
Maximize Service Credit: For FERS employees, retiring at the end of the month offers a financial advantage. Your annuity will begin on the first day of the following month, so retiring on the last day ensures your annuity starts immediately, minimizing any gap between your last paycheck and the first annuity payment.