Choosing a Retirement Date - CSUM (2024)

FAQs

How to choose a retirement date? ›

You may retire on any day of the month you choose, to include weekends. It is common for employees to choose a retirement date that aligns with a day they are scheduled to work, but this does not have to be the case.

Maximize Service Credit

Thus, retiring on the last day of the month means your annuity starts the very next day. This timing minimizes the gap between your last paycheck and your first annuity payment. CSRS retirees should consider retiring within the first three days of a month for a similar benefit.

As a general rule, the end of the month is good for those with pensions, as those often start on the first day of the month after retirement. In this scenario, retiring on the 31st means that you won't have a gap in pay.

Retirement may be effective any day of the week--if the employee's last day of employment is Friday, retirement may be effective on Saturday. To maximize the retirement benefit, employees may decide to retire on their birthday or a subsequent birthday quarter to increase their benefit factor.

3-4 Months Before Retiring

Check with your credit union, employee organization, or insurance plan to see if certain types of payroll deductions can be continued into retirement. Check with your health benefits officer or personnel office to determine your eligibility for health and dental coverage as a retiree.

The safe withdrawal rule is a classic in retirement planning. It maintains that you can live comfortably on your retirement savings if you withdraw 3% to 4% of the balance you had at retirement each year, adjusted for inflation.

According to the $1,000 per month rule, retirees can receive $1,000 per month if they withdraw 5% annually for every $240,000 they have set aside. For example, if you aim to take out $2,000 per month, you'll need to set aside $480,000. For $3,000 per month, you would need to save $720,000, and so on.

What is the difference between a member retiring on December 31st versus January 1st? A member who retires on December 31st may receive their COLA one year earlier than someone who retires on January 1st of the following year.

What is the 4 rule in retirement? ›

The 4% rule says people should withdraw 4% of their retirement funds in the first year after retiring and take that dollar amount, adjusted for inflation, every year after. The rule seeks to establish a steady and safe income stream that will meet a retiree's current and future financial needs.

Many employers only require 30 days' notice for retirement. However, it is wise to start the process far sooner. Even non-management employees should consider giving at least six-months of notice to protect their professional reputation and ensure a smooth transition.

If you work for the government or an employer that offers a defined benefit pension plan, it might be smart to retire on the day that follows the anniversary of your first day working there. This way, you'll receive an extra year of service credit toward the calculation of your pension benefits.

Timing the payout may reduce a member's tax liability by shifting it into the next year where income is expected to be lower. For some members, timing the payout to occur in the same year as the lump sum payouts for leave hours, may be a better way to avoid some tax liability.

Simple know his DOB. Add 60 years. If birthdate falls on first of any month, then he retires in the preceding month. A person born on 1st Aug( let us say), will retire on 31 July.