Find The Best Day of the Month for FERS Retirement

If your tenure in the federal government comes to an end and you’re thinking about FERS retirement, you’re likely looking ahead to the start of your retirement. Whether you plan to explore various hobbies or want to travel the world, the best is yet to come in the next years of your life.

While you may think the hard part is over, you still need to be strategic about when you retire. This makes all the difference in regard to your benefits. The exact date that you file for retirement benefits can have a significant impact on the process and the time it takes to receive payments.

Keep reading to learn about the FERS retirement process and the best day of the year to file for benefits.

Your FERS Retirement Starts on the First Day of the Month

The government has a set policy for FERS Employees and “Trans” FERS employees (or employees who started on CSRS and transferred to FERS) applying for retirement benefits:

• Regardless of the day you retire, your retirement date will be set on the first day of the next month.
• Your first annuity check will be issued on the first day of the month after. 

If you decide to retire on December 15th, then your retirement date will be set for January 1st. Your first check will be cut on February 1st.

Regardless of the month that you choose to retire, there are days that are good to retire and days that are bad to retire. For example, if you retire in the last days of the month (let’s say February 26-28) then your retirement day will be set a few days later on March 1st. However, if you retire at the start of the month (like March 2-4), then you will have to wait a whole extra month – until April 1st – to officially be listed as retired.

Your retirement date can mean the difference between waiting 30 days for your first check to almost 60. Those are two months that you will need to account for without payment. If the end of the month is approaching, make sure your FERS retirement application is complete or consider waiting a few more weeks to apply.

If the end of the month is approaching, make sure your FERS retirement application is complete or consider waiting a few more weeks to apply for retirement.Click To Tweet

FERS Employees Will Receive Unused Annual Leave Pay Shortly After Retiring

There is good news for employees who apply for retirement at the start of the month or for workers who are worried about receiving an annuity check a month after their retirement date. Your unused annual and sick leave is typically paid out 10 to 40 days following your retirement date.

Most human resource departments will try to pay out employee leave soon after someone retires so they have extra pay to get them through the month before their first annuity check arrives. While FERS employees don’t want to rely on this money in the event that it does take 40 days to arrive, it can serve as a cushion for your finances.

If you’re not sure how much unused sick leave and vacation time you have, MyFEDBenefits has you covered. Follow this guide for crediting unused sick leave to understand how to calculate your expected payment and determine whether you have paid leave that you want to spend before you retire.

The OPM Backlog Should Not Affect Your Retirement Date

Federal employees have grown increasingly concerned about the backlog of applications by the Office of Personnel Management. This is something that MyFEDBenefits has reported on as well. In December and January, some employees can expect to wait more than 60 days for their retirement application to be processed. Employees need to take the OPM backlog into consideration when they retire, but it shouldn’t make or break their decision to leave federal service.

During the 60 or so days for your application to be processed, the OPM will pay “interim” annuity checks until your file is reviewed and approved. These checks are not full annuity checks and most recipients will receive 50-90% of what they should once their application goes through.

The OPM issues these checks to help retirees pay their bills for the first few months of retirement, even if there is still a significant backlog for applications.

It’s important to remember that you are receiving interim annuity checks so you don’t worry for the first few months when you receive payments that are significantly less than you expected. Your funds will get paid out as soon as the applications process is complete.  

Learn More About Your Retirement Options

Do you know the best way to retire and have all the benefits you need? You may discover that there are gaps in your knowledge that could limit your retirement options.

That’s why our experienced benefits specialists are here – to help you maximize your retirement benefits so you get the most support possible and can focus on your travel plans or exciting hobbies. Contact MyFEDBenefits today to schedule your free retirement review.