A well-timed retirement can make parting that much sweeter

By: Stephen Barr 
The Washington Post, November 27, 2001


What's the magic date for retirement? There isn't one, of course. Retirement is a personal decision -- and that includes selecting the date to say goodbye to the workplace.

But Tammy Flanagan, the retirement benefits counselor at the National Institute of Transition Planning Inc., points out that timing when to leave the government can be an important decision.

Here's Flanagan's scenario for Civil Service Retirement System employees who are retiring after 30 years of service. It's all about the calendar.

Pay period No. 26 for the 2001 federal pay year ends Jan. 12, 2002, but that's not the date to retire, according to Flanagan.

Even though employees could accrue additional leave through Jan. 12, 2002, they would not be entitled to receive a retirement check covering January and paid in February. Under CSRS rules, retirement begins on the first day of the month following the date of retirement, unless the employee leaves on the 1st, 2nd or 3rd day of the month. In those cases, retirement begins the following day.

For CSRS employees, Flanagan says, the "best" retirement date would be Jan. 3, the last date they could retire and still receive a retirement check for January. This date also allows would-be retirees to receive salary for three days (and one of them is a holiday).

If the employee has accumulated annual leave, the check for that leave will come in 2002 -- usually within 30 days of separation -- and is taxable in 2002.

Annual leave is paid out in a lump sum at the rate employees would have received had they stayed on the payroll. For CSRS employees who retire Jan. 3, most of the lump sum will be paid at the 2002 salary level. The 2002 pay raise, averaging 4.6 percent, is effective Jan. 13 for most employees.

The newer Federal Employees Retirement System operates under different rules. Under FERS, all regular retirements begin the first day of the month following the date of retirement.

According to Flanagan, FERS employees need to keep two deadlines in mind. They have to retire no later than Dec. 31, 2001, if they wish to receive a January 2002 retirement check and Social Security benefit. They have to leave before Jan. 12 if they don't want to lose annual leave in excess of 240 hours.

Flanagan thinks some FERS employees might want to forgo the January retirement check and work through Jan. 11 (a Friday) to receive payment for additional accumulated annual leave as well as nine more days of salary.

To decide, Flanagan says, compare the dollar value of the FERS basic annuity benefit and Social Security benefit with the dollar value of the extra annual leave accrual and the nine days of salary.

Health Care Forums

Rep. Constance A. Morella (R-Md.) will sponsor "open season" forums tomorrow to discuss health insurance options for federal employees and retirees.

The morning session, from 9:30 to 11:30 a.m., will be held at the National 4-H Conference Center, 7100 Connecticut Ave., Chevy Chase. The evening session, from 7:30 to 9:30 p.m., will be held at the Theater Arts Building at Montgomery College, 51 Mannakee St., Rockville.

The forums are being held by Morella in cooperation with the National Association of Retired Federal Employees, Maryland Federation of Chapters.

Speakers include David Lewis, of the Office of Personnel Management; Walton Francis, author of the Consumers' Checkbook guide to the federal health plans; and Col. Cecily David, an expert on Tricare, the military's insurance program.


Yuth Nimit, executive secretary at the Center for Substance Abuse Prevention's National Advisory Council, has retired after 25 years of federal service. During his career, Nimit served as a biomedical scientist at the National Institutes of Health and as associate director for management of the National Vaccine Program at the Health and Human Services Department.

Global Action on Aging
PO Box 20022, New York, NY 10025
Phone: +1 (212) 557-3163 - Fax: +1 (212) 557-3164
Email: globalaging@globalaging.org


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