Q. I’m a 66-year-old federal employee under FERS. I’ve been working for the government for 26 years and six months. Next February will be my 27th year. I would like to know what is the best month to retire in 2013.
A. There is no such thing as the best month to retire. However, for two reasons, many employees choose to retire at the end of the year. First, if they have unused annual leave that exceeds the carryover limit, they can receive a lump-sum payment for all those hours and, in a year when federal employees are being given a pay increase, have any of them that fall after the pay raise goes into effect paid at the higher hourly rate. Second, with a reduced income level throughout an entire year, their federal tax rate may be lower.