Planning Your Official Retirement Date

Feb 17, 2020 | Miscellaneous, Retirement Planning

It is often said that there are only two things that are certain in life: Death and taxes. Considering that Benjamin Franklin made that statement a couple of centuries ago, when times were quite different, we would add one more certainty to the list. Nearly all of us will retire at some point.

But when? Maybe you can’t wait to retire, or perhaps you’re the type who enjoys your career. Either way, you will probably want or need to retire at some point, and there are certain factors you will consider first.

Many factors will influence your retirement decision. In our blogs, we often focus on things like emotional readiness, financial ability, and your budget in retirement. These are certainly important factors in the equation. With regard to federal employees in particular, you will need to accumulate enough years of service before retiring, and you might wish to reach a particular savings goal with regard to your Thrift Savings Plan. Debt is another factor, as many would rather not enter retirement carrying significant debt.

Timing your annuity payments. But this time, let’s get down to the finer points of timing your retirement. When you retire, your paychecks will cease and your annuity payments will begin. Naturally, you don’t want to go too long before your retirement income starts rolling in.

If the program works correctly you can expect to receive your first annuity payment on the first day of the month after the month in which you retire. But you will receive your first check on the first of the month after that. So, if you retire on October 4, your annuity will begin on November 1 and you will receive your first check on December 1.

Clearly, that might leave too much of a gap between your final paycheck and your first annuity payment. That’s why many FERS employees schedule their retirement dates toward the end of the month. But of course, there’s no rule stating you must do it that way; if you plan ahead for the gap in payments, that could work out just fine as well.

The bottom line is that as your expected retirement date draws closer, you should pay attention to these finer details. Remember to schedule an appointment with us, and we can review these issues before you set the final date for the end of your service.

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