The right timing can greatly impact your federal retirement by helping you maximize your annuity start date, annual leave lump-sum payout, sick leave credit, and overall cash flow during the transition to retirement. Poor timing, on the other hand, could mean forfeiting accrued leave or facing a longer gap between your last paycheck and your first annuity payment.
Why Retirement Timing Matters for FERS Employees
Three main factors influence the financial benefits of your retirement date:
- End of the Month: Your FERS annuity begins on the first day of the month following your separation. Retiring on the last day of a month minimizes (or eliminates) any income gap.
- End of a Pay Period: Annual and sick leave accrue only at the end of a biweekly pay period. Retiring on or after the pay period end date ensures you receive credit for leave earned, boosts your lump-sum annual leave payout, and adds sick leave to your creditable service.
- End of the Leave Year: Most federal employees can carry over only 240 hours of annual leave. Retiring just before a new leave year begins allows you to receive a lump-sum payment for all unused annual leave, including amounts over the carryover limit.
Top Recommended Retirement Dates for 2026
Based on these principles, here are the strongest dates for FERS retirements in 2026 (and one spillover into early 2027):
- May 31, 2026: The end of the month and a pay period, this date optimizes pension timing (annuity starts June 1) and ensures full leave credit without affecting the leave year cap.
- October 31, 2026: Another end-of-month/pay-period alignment. Annuity begins November 1, with maximized leave accruals and no significant income gap.
- December 31, 2026: The end of the calendar year and pay period. A popular date; your annuity starts January 1, 2027, with virtually no gap.
- January 9, 2027: The end of the 2026 leave year and a pay period. This maximizes annual leave payout and provides a bit more salary before retiring. Annuity begins February 1, 2027.
Before Choosing a Date
- You must meet FERS requirements (e.g., minimum retirement age with at least 10 years of service, or age 62 with 5 years) before any date works. Confirm with your agency’s HR.
- Think about FEHB/FEGLI continuity, TSP withdrawals, Social Security timing, taxes on your leave lump sum, and family or health needs.
- Most agencies follow standard biweekly pay periods, but confirm your payroll calendar (e.g., via NFC or OPM resources) as some differ slightly.
Timing your federal retirement strategically can add thousands to your benefits through better leave payouts and smoother income transitions. If you’re approaching retirement, reach out to an FRC® who can help tailor a plan for a confident future.
