One FERS date, June 30, is not only at the end of the month, but also the end of a leave period. This is a particularly good date, because it allows for one last accumulation of annual leave to create a larger lump sum payout.
Retiring on the last day of the month is typically the best option. This enables you to collect all your paychecks during this period. You can also benefit from collecting any holiday pay that might be offered by your employer for that month.
“Retiring into a bear market makes it more likely you'll run short of money over the long haul,” says Liz Weston, CFP, a financial advice columnist and author of “The 10 Commandments of Money.” Current conditions arguably make 2023 the worst year for retirement since the Great Recession.
If the retirement income is low enough, it may reduce the marginal tax rate of the earner (e.g. they may drop from the 24% tax bracket to the 22% tax bracket). By retiring at the beginning of a year you will receive your leave payout in a year of potentially less income, thus minimizing the taxation of the payout.
In general, it doesn't make too much difference. For retirement computation purposes, all months have 30 days. No credit is given for the 31st day of the month. So, for example, it doesn't really matter if you make your retirement effective on Saturday, Jan.
For some, retiring at the end of the calendar year (31st December) makes sense as it probably allows you to leave work slightly early and make the most of the Christmas holiday season. It also means new year, new start. But if you do have the choice, you might want to consider retiring around the end of March.
The finding echoes a few others, the New York Times reports: “An analysis in the United States found about seven years of retirement can be as good for health as reducing the chance of getting a serious disease (like diabetes or heart conditions) by 20 percent.
You should give notice for retirement at least 3 to 6 months before the anticipated date of retirement. If you are a junior employer, you may be allowed to give at least a 30-day notice in advance. Research your company retirement policy to know how much notice you should give.
Cons of retiring early include the strain on savings, due to increased expenses and smaller Social Security benefits, and a depressing effect on mental health. There may be ways to chart a middle course—cutting back on work without fully retiring.
However, if I was to retire, I would probably retire at the beginning or mid-December – leading into the Australian summer holidays and festive season. Is there really a better time to live in Australia!? December is probably also the most common time in the financial year to retire, too.
Retiring at Age 65 or Earlier
An individual's retirement savings, health benefits, and social security commonly dictate the best time to stop working and vary by age.
The Very Beginning or End of the Year
Some people without access to ample cash reserves might plan to pull money from retirement accounts soon after stopping work, however. For such workers, the best time to retire might be at the very beginning or very end of the year.
Retirees typically get up at 8.30am, giving them an additional one-and-a-half to two hours' sleep than their younger, still-in-work counterparts. Most over-60s do this daily, rising at the same time at weekends too, meaning every day is an opportunity for a lie-in.
The safest place to put your retirement funds is in low-risk investments and savings options with guaranteed growth. Low-risk investments and savings options include fixed annuities, savings accounts, CDs, treasury securities, and money market accounts. Of these, fixed annuities usually provide the best interest rates.
You have made this a lovely place to be every day, and I will miss the office terribly — best wishes to you all.” “Today is my last day at Blythe and Anders. I've been counting down the days to my retirement so I can start traveling the world but I'm also really sad.
For example, you might say that you will be retiring on January 1, 2022, but you are willing to stay for four weeks or until a specific date to help train your replacement. Also, remind your employer of your current job title, how long you've been with the company and your most significant achievements.
A 2017 study that tracked several essential cognitive functions of nearly 3,500 participants before and after retirement found “all domains of cognition declined over time.” What's more, verbal memory specifically declined 38% faster after retirement than before retirement.
A 65-year-old can expect to live another 19 to 21.5 years, on average, according to the Social Security Administration. What's more, the government agency says a third of 65-year-olds will hit age 90, and 1 in 7 will live beyond age 95.
You Have Ample Savings
You planned and set a goal for retirement savings. Now your investments meet or exceed the amount you were hoping to save. This is another good sign you could take early retirement. If you didn't plan for early retirement, you will need to recalculate how long your savings will last.
Once you have an estimate of your annual retirement spending, you can begin to work out how much you need overall by multiplying your annual spending by the number of years you expect to spend in retirement, figuring in an extra 3% per year for inflation.