Retirement date

Q. I will be retiring in 2016 and was considering Aug. 6 (since it’s the end of a pay period), but I have heard that it is best to retire on the first to the third day of the month. Can you give me the pros and cons of each scenario?

A. Whether you are a CSRS or a FERS employee, you should retire no later than the last day of a month. That way you’d be on the annuity roll in the following month. While CSRS employees can retire up to the third day of a month and be on the annuity roll in that month, their first month’s annuity would be reduced by 1/30 for every day they are still on the employment roll. FERS employees don’t have that flexibility. They have to retire no later than the last day of a month to be on the annuity roll in the following month.