Using Up Annual Leave ahead of Retirement (2024)

Published: October 30, 2023
More in: Retirement Policy

If you’d rather use your hours for vacation rather than as a lump-sum payment, it’s better to schedule and use it up over the course of your last year. Image: Andre Bonn/Shutterstock.com

By: FEDweek Staff

Some employees who plan to retire late in a year think about taking an extended vacation before going out, using up accumulated annual leave rather than taking it as a lump-sum payment afterward. Within limits that’s permitted; just don’t create a situation in which it appears you are trying to burn off leave.

According to OPM, while an employee has the right to use annual leave for vacations, rest and relaxation, and personal business, it is subject to the right of the supervisor to schedule the time at which it can be taken. As a rule, it wouldn’t be in your supervisor’s best interest to have you filling a position but doing no work while there’s work to be done. And if you are planning to retire, your agency can’t hire a replacement until you are off the rolls.

Even if your supervisor is willing to let you burn off your leave, a Comptroller General ruling nixes that idea. B-46683, 24 Comp. Gen 511 states that “terminal annual or vacation leave may not be granted immediately prior to separation from the service in any case where it is known in advance that the employee is to be separated from the service.”

That doesn’t mean that you can’t take a few days off before the end of the year or before you retire. You can, with the approval of your supervisor. However, for your supervisor to approve it, the amount you request needs to be reasonable. Even then, most agencies will require that you be at work on the day you retire in order to complete the processing needed to separate you from the service.

If you’d rather use that time as vacation rather than as a lump-sum payment, it’s better to schedule and use it up over the course of your last year.