Is this vacation pay deferral a common benefit for retiring employees in the U.S.?
This occurred to me, too. I was wondering about the 403b, which seems unlikely, but the IRA would be nice.VictoriaF wrote:If you get an unused vacation compensation in the year following retirement, it may qualify you for an IRA contribution for that year, if the employer sends you a W2.
Yes, I've exploited this when changing jobs.Watty wrote:I don't know if it is calculated this way everwhere but at some compnaies I have worked for your health and dental insurance was paid thorugh the end of the month that you left the company. This means that if you time your retirment to be on the 1st day of a month then you may also get almost a full months extra coverage.
Exactly. Furthermore, if you retire at the end of a calendar year (which many people seem to do, I'm not sure why) then you're kind of throwing away the deferred vacation pay benefit.Watty wrote:If you will be retiring in the middle of the year your final years income will be about half of your normal income so that would put you in a lower tax bracket then too.
Bob's not my name wrote:Interesting. I don't think any of those factors play in my situation. Vacation is earned over the course of a year, there's no pension, there are no stock options or RSU's, and I don't think the deferred vacation pay gets you anything in terms of benefits.
Bob's not my name wrote:First, I know there's lots of hysterical journalism about how Americans get far less vacation than our role models the French, but not since early career have I had a job with insufficient vacation. In my new job I get four weeks' vacation...
I'm an immigrant.origami wrote:Bob's not my name wrote:First, I know there's lots of hysterical journalism about how Americans get far less vacation than our role models the French, but not since early career have I had a job with insufficient vacation. In my new job I get four weeks' vacation...
As a foreigner working in the US for 11 years I can tell you, that you seem to have a typical American lifestyle where life/work balance is skewed heavily towards work (by international standards). In my opinion quality of life does suffer in this case for a lot people. There is just NO NEED to work that much.
Wagnerjb wrote:One of my colleagues told me of his plan, and I think this is the "best practice" use of vacation. He will work until Thanksgiving, then stop. He will use his unused current year vacation to stay on the payroll until January 1st 2014. On January 1st, he is granted the full year's 6 weeks vacation for 2015. He uses the 6 weeks of 2015 vacation pay and his 3 weeks of banked vacation to stay on the payroll until late February 2015. Not only does this strategy allow him to earn the 6 weeks vacation for 2015, but it boosts his pension.
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