How to Beat the Rush for Dec 31 Retirement Rush

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“I am a 35-year USPS employee and am planning on retiring this year. I am 58. I have heard about the backlog of retirement applications that OPM gets at the end of the year and wonder if I should think about retiring in Oct or Nov to beat the rush. Dec 31 is a perfect date, Friday, the last day of the year, and the last day of the last pay period for the year. Would love to get your opinion on this. Love the podcast.” – Dean

Dean wants his retirement to be processed in a timely manner, but also wants to choose the most advantageous time to retire from his long federal career.  He is right, the end of the “leave” year is a very popular time to retire and for reasons that maximize the lump sum payout of annual leave.  For example, if Dean retires at the end of 2021, he may benefit by retiring at the end of December if:

  • He carried over leave from 2020 (potentially 240 hours)
  • He accrued and not used his 2021 annual leave accruals (potentially 208 hours)
  • His lump sum payment will be computed by payroll after retirement date (2022)
  • The amount will be based on salary rate if A/L was used (2022 pay rate)
  • This payment will be taxable in the year received (2022)


Under FERS, all voluntary retirements “commence” on the first day of the month after you retire.  This is why, regardless of which month you decide to retire, the last day of any month is better than mid-month:

Example:  Retire November 30, 2021, and your first FERS benefit would be for December 2021 (payable on January 1, 2022)

Example:  Retire November 15, 2021, and your first FERS benefit would be for December 2021 (payable on January 1, 2022)

Don’t worry too much about processing delays,
but be sure that you:

Complete:  Accurately complete your forms

Provide:  Provide the agency with 60 – 120 days notice

Hope:  Hope for the best

Prepare:  Prepare for a delay

Have:  Have 6 months of living expenses on hand

YOUR best date to retire is when you are: Financially ready and mentally prepared!

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