Q. I am eligible to retire Nov. 1 but plan on staying until around the end of the calendar year. I will receive a lump-sum payment for unused annual leave. I would like the taxes on that lump-sum payment to be on my 2014 taxes. What is the best date for me to retire? I am assuming it would be either the 1st, 2nd or 3rd of January 2014 so that I can began receiving my annuity Feb. 1.
A. The closer to the end of a year you retire, the more likely it is that you’ll receive your lump-sum payment in the following year. Leave at the end of 2013 and be taxed in 2014. Since as a CSRS employee, you can retire up to the third day in a month and be on the annuity roll in that month. Retiring in January 2014 would make the lump-sum taxable in 2014.