Q. I am planning to retire either at he end of 2011 or early 2012. Which is the best time to retire, should it be the end of December or early January? How would it affect my annuity if I set the retirement date for Jan. 3, 2012?
A. If your main concerns are to 1) get credit for all the annual and sick leave you earned by completing a pay period, and 2) maximize the size of your lump-sum payment for unused annual leave, and 3) walk off the employment roll and onto the annuity roll without the break of a single day, then you’d want to retire on Dec. 31, 2011. In 2012, the leave year ends on Jan. 12. To get close to the same benefits you’d have to retire on Dec. 29, 2012. In 2013, the leave year end on Jan.11, 2014. So Dec. 28, 2012, would be the optimal date. Of course, you could work up to the third day of January in the latter two years. However, while you’d gain a few more days of pay, you wouldn’t get partial credit for any annual or sick leave earned during those days and your first month’s annuity would be reduced by 1/30th for every day you weren’t on the annuity roll.