Retirement date


Q. Is there a distinct advantage or disadvantage to retiring at the beginning of 2012 or end of 2011? I realize that lump-sum payments would be better tax wise but wonder if Dec. 31 or Jan 1 has other consequences?

A. For most employees, the 2011 leave year ends on Dec. 31, 2011 and the new leave year begins on Jan. 1, 2012. If you were to leave after Dec. 31, any annual leave you had in excess of 240 hours would be forfeited. Further, if you are a FERS-covered employee, you wouldn’t be on the annuity roll until February. As for lump-sum payments, they are taxed in the year they are received, not the year they are earned. Therefore, from a tax perspective, it wouldn’t make any difference whether you retired at the end of 2011 or the beginning of 2012. In neither case would you receive any lump-sum payments until 2012.



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

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