Is It More Beneficial To Retire In December Or January?

This week our question comes from Steven: Is January better than December in order to get a larger FERS supplement between MRA and 62? Micah goes beyond the obvious answer that working for longer translates to a greater supplement. Choosing the best time to retire should allow for more factors to affect that decision.

If you have more questions on when you should retire from Federal service, leave us a comment below and we'll try to answer it in a future episode.

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Micah Shilanski, CFP®
#PlanYourFederalRetirement #VERA

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[nicholasrunowich]

You never answered his question . As I understand it, the quick and easy way to calculate for the supplement is years [whole number] of credible service / 40 years "x" what your SS says you will get at 62 years old. So therefore, mathematically - what does it matter where you go out [retire] on Dec 31 or on Jan 1 - with respect to the supplement (unless in Jan your SCD goes up - additional one year added to years of service). Please really answer his question, rather than give an "happy answer" of not retiring in Alaska in Dec. Extra days / months of service don't count in Supplement - as it is a whole number in the numerator - IS THAT CORRECT ??? If it is a whole number in that numerator - that your philosophy of working longer translates to a greater supplement is wrong - Is this correct ?? If the numerator is rounded to the nearest whole number - then is it the day after your 6 months of credible service that is jumps to the next whole number ??? You could have talked more about the strategies and the math involved in maximizing the Supplement - which was really his question (not just going out in January - but "maximizing" that Supplement) . You could have talked about real benefits of retiring into Jan and said that if you retire after the leave year of the next year starts, you get the Salary increase (raise) for the pension [high 3] calc and you get your "bonus" (typically the bonus comes in the 2nd biweekly paycheck in January) -- or do you ?? that might be my question. Retiring in January is a tradeoff of giving up your Use/Loose of Annual Leave for the "gift" that keeps on giving [a salary increase for high 3 calculation for going out in January] . There was so much more to talk about and expand upon on his question (benefits potentially beyond the supplement) that you could have done here in your video. Please answer his question . Thank you.

[lareekriz]

Does Tammy Flannigan still work for the firm? Her videos were very helpful, clear & instructive, please bring her back!

[maemoodog]

If you wish to retire in December 31. When should you put in your retirement papers. Can I do it on December 1

[pennguino]

Thanks for the information. I was hoping for a numbers answer. "If you retire in January, you may get a little be better calc in benefits." Can you explain what those benefits are? What difference does one day make (Dec 31-1Jan)?

[EatLeadPal]

Is FERS similar to SS in that the longer you put off collecting after leaving federal svc, the more you get. For example, if I can collect $2000 at 62 or $3000 at 67, and I leave at 62 but don't apply for the retirement until 67, will I get $3000 a month or only $2000 a month because I left early?

[maryh]

Hi! Wanting to know, if I retire on Dec 31, 2022 and receive my annual leave lump sum payment in 2023 (exceeding $7000), will this be considered earned income for 2023 and am I eligible to contribute to a roth IRA for 2023 up to the max $7000 being over 50 and under the income treshold?

[salahglobal]

Thank you very much for the great information. Question: Do I need to list my ex-spouse on my FERS retirement application if we were married for less than 10 years (25 years ago)? Thank you!