Let cut right to the chase. Here are the best dates to retire in the year 2025:
January 11, 2025
May 31, 2025
October 31, 2025
December 31, 2025
January 10, 2026
But why are these the best?
Let’s go over the biggest factors you need to consider when picking a retirement date.
#1 – End of the Month
Your Federal Employee Retirement System (FERS) pension is payable the month after you retire.
For example, if you retire January 1st, your pension is payable February 1st. You would have to wait a whole month for your pension to be payable.
On the other hand, if you retire on January 31st, your pension is payable February 1st. You would only have to wait one day for your pension to be payable.
This is why most people try to retire near the end of the month.
#2 – End of a Pay Period
Your leave (sick and annual) accrues at the end of every pay period.
If you were to retire in the middle of a pay period, you don’t accrue any leave for that partial pay period.
That is why most people retire at the end of a pay period if they can help it.
As you may know, annual and sick leave does affect your retirement. With more sick leave hours, your FERS pension increases. With more annual leave hours, the lump sum payment you receive at the start of retirement increases. For more information on annual and sick leave at retirement, check out these articles: annual leave or sick leave.
# 3 – End of the Leave Year
With annual leave being use-or-lose, you can take only so many hours of annual leave into the next leave year. For most feds this limit is 240 hours.
But retiring near the end of the leave year means that you can have more than the 240 hour limit of annual leave on the books when you retire.
For example, if you have 300 hours of annual leave and you decide to retire before the leave year, then you’ll get a lump sum check for what you would have made had you actually worked those 300 hours.
Many federal employees retire near the end of the leave year so that they can maximize their annual leave payout.
What’s So Good About These Dates?
Let’s break down these dates one-by-one and talk about why they’re so good:
January 11, 2025 – End of a pay period. End of the leave year.
May 31, 2025 – End of a pay period. End of the month.
October 31, 2025 – End of a pay period. End of the month.
December 31, 2025 – End of the month. End of the leave year.
January 10, 2026 – End of a pay period. End of the leave year.
Are You Eligible To Retire?
Another important factor to consider is your eligibility for retirement. There are many different types of retirements for federal employees. The retirement with the most benefits is a “full retirement”. To be eligible for a full retirement you have to meet one of these three criteria:
At least 30 years of service by your Minimum Retirement Age (MRA) (see article to find your MRA)
At least 20 years of service by the age of 60
At least 5 years of service by the age of 62
For special provision employees, you can qualify for a full retirement at age 50 with at least 20 years of service or any age with at least 25 years of service.
There are other types of retirement such as: MRA+10, postponed, deferred, Voluntary Early Retirement Authority (VERA), or disability retirement. To find out more about these retirement types and the benefits involved, check out this article.
What Are You Comfortable With?
You should be comfortable with your retirement date. Some federal employees want to get out of their federal government position as soon as they can. Working longer just isn’t an option for them.
Other federal employees enjoy their jobs and leaving as soon as possible is not a priority.
Conclusion
Picking a retirement date is a big decision for all federal employees. After finding your eligibility and comfort level, it is important to consider whether or not your retirement date maximizes your benefits. If picking a retirement date still feels overwhelming, feel free to schedule a meeting with us here: https://app.hawsfederaladvisors.com/whatservicemakessense
