Which month to retire


Q. I am planning on retiring at the end of December. I am in the Civil Service Retirement System and have over 31 years in the legislative branch, where I am still employed. I also have another 14 months in the executive branch, for a total of 32 years, five months. I will be 53 in late December, so will I be penalized for not quite reaching age 53? I realize I already have to take a 4 percent reduction because I’m under age 55.

My retirement counselor advised me to retire at the end of November instead of December so I could take advantage of the cost-of-living adjustment. Is this true?  Am I better off, and will I be able to receive the COLA in January? Also, does that mean that I would receive 3.6 percent of my total annual income (which I figure to be over $70,000 a year). That would mean a $2,520 a year (or $210 a month) raise for me.

A. You won’t be eligible to retire until you reach age 55, unless you are offered an opportunity to retire early or are involuntarily separated. If either of those is the case, your annuity would be reduced by 2 percent for every year (0.17 percent per month) you were under age 55.

If you retired at the end of November, you’d be on the annuity roll in December and eligible for 1/12th of the COLA payable in January 2012. Your first full COLA wouldn’t be payable until January 2013.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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