Best day to retire


Q. I would like to retire this year. I am under CSRS and will have 38 years of service in July 2015. I will be 56 in November 2015. I would like to retire at the end of the year — Dec. 31 or Jan. 1. Will my lump-sum payment for my annual leave be taxed for 2015 or 2016? Also, I noticed that the date(s) I would like to retire are in the middle of a pay period. Would this be a problem?

A. If you retire on Dec. 31, you’ll be on the annuity roll for the entire month of January and entitled to a full annuity payment for that month, If you retire on Jan. 1, you’ll also be on the annuity roll in January, but your annuity payment for that month will only be 29/30 of the full amount. If you retire on any date other than the end of a pay period, you won’t receive credit for any annual or sick leave you would have earned during that pay period. Taxes on your annual-leave lump-sum payment are assessed in the year it is received.


About Author

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

Leave A Reply