Q. If I go on annual leave for 30 days before I retire, is there an effect on my annuity?
A. The more important question is this: “Can I go on annual leave for 30 days before I retire?” The answer to that question is no. The Comptroller General has ruled that employees may not take terminal leave. While your supervisor might approve your use of some periods of annual leave, he or she would need to schedule it so that it didn’t interfere with the needs of the government. Further, most agencies require that a retiring employee be at work on that last day to complete the steps needed to separate from the service.
I’m getting ready to retire after 21 years of Civil Service under the FERS program. I’ve submitted my initial request to get an idea of my annuity and have not officially requested a date yet. I was wondering whether to take my annual leave and will have 320 hours with use or lose added by my retirement date. How much will this lump sum be taxed if choose to cash out? I’ve heard 25%, 32%, 38%, etc. I’ll be 64 and wanted to also figure out if I’ll be getting a reduced Social Security amount due to being retired military (23 years service) . I was counting on 3 checks: military retirement (have been getting since I retired in 1999), my FERS annuity and my Social Security.
The short answer is that your lump-sum payment for unused annual leave will automatically be reduced by 25 percent to cover potential tax liabilities. Out of that 25 percent, deductions will be taken for taxes — federal, state (if applicable), and local (if applicable) — but not for any premiums to cover your health or life insurance. Those deductions will be taken from your final paycheck or first annuity payment, whichever is applicable.
Thank you sir. r/Ben Barker