Retirement Date Decision, Pros & Cons (Feds)
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Retirement Date Decision, Pros & Cons (Feds)
I'm a fed seeking to retire on 5/31. Conventional wisdom suggests this is a propitious date since my pension will then begin 6/1.
Coincedentally, my Service Computation Date is also on the 31st of the month, so my understanding is that this means I'll get an additional full month pension credit by staying until the last date of the month AND receive a full month subsidy on the healthcare benefit.
The "downside" to this is that 5/31 falls in the middle of a pay period that ends on 6/6.
So my understanding is that I will not receive any annual leave or sick leave benefit for that last pay period, by leaving before 6/6.
I am gut checking myself here, would appreciate an outside view.
My choice is between
(a) 5/31/2020 - pension that begins on 6/1, a full month pension credit and full month of healthcare subsidy
OR
(b) 6/6/2020 - pension that does not begin until 7/1, I have to pay full healthcare premium in June and no pension credit for June BUT a full additional leave credit of 6 hours of annual leave and 4 hours of sick leave.
I am leaning with sticking with 5/31, but thought I might pass it by other feds here for any other opinions or views. Thanks.
Coincedentally, my Service Computation Date is also on the 31st of the month, so my understanding is that this means I'll get an additional full month pension credit by staying until the last date of the month AND receive a full month subsidy on the healthcare benefit.
The "downside" to this is that 5/31 falls in the middle of a pay period that ends on 6/6.
So my understanding is that I will not receive any annual leave or sick leave benefit for that last pay period, by leaving before 6/6.
I am gut checking myself here, would appreciate an outside view.
My choice is between
(a) 5/31/2020 - pension that begins on 6/1, a full month pension credit and full month of healthcare subsidy
OR
(b) 6/6/2020 - pension that does not begin until 7/1, I have to pay full healthcare premium in June and no pension credit for June BUT a full additional leave credit of 6 hours of annual leave and 4 hours of sick leave.
I am leaning with sticking with 5/31, but thought I might pass it by other feds here for any other opinions or views. Thanks.
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Re: Retirement Date Decision, Pros & Cons (Feds)
why would the healthcare premium be different?
what is one month of pension worth to you?
what is one month of pension worth to you?
Re: Retirement Date Decision, Pros & Cons (Feds)
Six hours of AL and 4 hours of SL are not worth the manipulation. Just pull the plug on 5/31. After retirement, you will wonder why you even wondered about this.
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Re: Retirement Date Decision, Pros & Cons (Feds)
Having just gone through this, there is always a reason to extend work, especially when you are in the early stages of retirement eligibility. In my case there would have been a disproportionate advantage to just another month, but even more advantage to two more, and even more to three more, etc. etc. I chose the earliest date I could to qualify for healthcare, but left a lot of money on the table for not staying at least a few more months.
Re: Retirement Date Decision, Pros & Cons (Feds)
Retiring on the last day of the month results in the most pay received while still starting your pension the next day Working just one day into the next month results in a loss of pension payment for the whole month. . This overwhelms the value of a few hours of additional annual leave payout.Barefootgirl wrote: ↑Sat Feb 08, 2020 4:00 pm I'm a fed seeking to retire on 5/31. Conventional wisdom suggests this is a propitious date since my pension will then begin 6/1.
Coincedentally, my Service Computation Date is also on the 31st of the month, so my understanding is that this means I'll get an additional full month pension credit by staying until the last date of the month AND receive a full month subsidy on the healthcare benefit.
The "downside" to this is that 5/31 falls in the middle of a pay period that ends on 6/6.
So my understanding is that I will not receive any annual leave or sick leave benefit for that last pay period, by leaving before 6/6.
I am gut checking myself here, would appreciate an outside view.
My choice is between
(a) 5/31/2020 - pension that begins on 6/1, a full month pension credit and full month of healthcare subsidy
OR
(b) 6/6/2020 - pension that does not begin until 7/1, I have to pay full healthcare premium in June and no pension credit for June BUT a full additional leave credit of 6 hours of annual leave and 4 hours of sick leave.
I am leaning with sticking with 5/31, but thought I might pass it by other feds here for any other opinions or views. Thanks.
Your annuity is based on your years, months and days of actual service plus your unused sick leave balance at time of retirement converted to years, months and days of service and then added to your actual years, months and days. This total service time is then rounded down to years and whole months for computation of your annuity. So you are not correct in assuming that since your service computation date happens to be on the end of the month that working till a month end will result in a round full month of service being added by finishing up through May.
You can go here to find a table convert your estimated hours at unused sick at retirement to years, months and days of service.
https://hr.nih.gov/sites/default/files/ ... echart.pdf
Suppose you are retiring on May 31, 2020 with 35 years, 6 months and zero days of service and will retire with 500 hours of unused sick leave.
From the table, 500 hours of sick leave converts to 2 months and 27 days of service (you move up to the next bracket if your number of hours falls in between. That means your total service is 35 years, 8 months and 27 days. Anything less than whole months is dropped for computing your annuity so the 27 day credit is "worthless" for annuity computation. You would have received the same annuity if you had retired with 348 hours of sick leave.
One implication of this is that as you approach retirement, if you have a significant number of "worthless" sick leave hours you might schedule physicals, and other medical exams, medical tests, elective surgery, dental work etc. to utilize the sick leave hours that do nothing for your annuity. Don't cut it too close because you might come down with the flu or something the last week or two of work and it would be a shame to lose an entire month of service for annuity computation because you tried to get down to the wire.
Are you retiring with eligibility for immediate retiree coverage for the federal employee health program? If so you receive the same premium subsidy for health care as you do as an employee, so there is no concern over retirement dates that I'm aware of in this area.
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Re: Retirement Date Decision, Pros & Cons (Feds)
Or use comp time, travel comp, credit hours, etc. in lieu of sick leave to keep you above the whole month mark.MnD wrote: ↑Sat Feb 08, 2020 5:37 pmRetiring on the last day of the month results in the most pay received while still starting your pension the next day Working just one day into the next month results in a loss of pension payment for the whole month. . This overwhelms the value of a few hours of additional annual leave payout.Barefootgirl wrote: ↑Sat Feb 08, 2020 4:00 pm I'm a fed seeking to retire on 5/31. Conventional wisdom suggests this is a propitious date since my pension will then begin 6/1.
Coincedentally, my Service Computation Date is also on the 31st of the month, so my understanding is that this means I'll get an additional full month pension credit by staying until the last date of the month AND receive a full month subsidy on the healthcare benefit.
The "downside" to this is that 5/31 falls in the middle of a pay period that ends on 6/6.
So my understanding is that I will not receive any annual leave or sick leave benefit for that last pay period, by leaving before 6/6.
I am gut checking myself here, would appreciate an outside view.
My choice is between
(a) 5/31/2020 - pension that begins on 6/1, a full month pension credit and full month of healthcare subsidy
OR
(b) 6/6/2020 - pension that does not begin until 7/1, I have to pay full healthcare premium in June and no pension credit for June BUT a full additional leave credit of 6 hours of annual leave and 4 hours of sick leave.
I am leaning with sticking with 5/31, but thought I might pass it by other feds here for any other opinions or views. Thanks.
Your annuity is based on your years, months and days of actual service plus your unused sick leave balance at time of retirement converted to years, months and days of service and then added to your actual years, months and days. This total service time is then rounded down to years and whole months for computation of your annuity. So you are not correct in assuming that since your service computation date happens to be on the end of the month that working till a month end will result in a round full month of service being added by finishing up through May.
You can go here to find a table convert your estimated hours at unused sick at retirement to years, months and days of service.
https://hr.nih.gov/sites/default/files/ ... echart.pdf
Suppose you are retiring on May 31, 2020 with 35 years, 6 months and zero days of service and will retire with 500 hours of unused sick leave.
From the table, 500 hours of sick leave converts to 2 months and 27 days of service (you move up to the next bracket if your number of hours falls in between. That means your total service is 35 years, 8 months and 27 days. Anything less than whole months is dropped for computing your annuity so the 27 day credit is "worthless" for annuity computation. You would have received the same annuity if you had retired with 348 hours of sick leave.
One implication of this is that as you approach retirement, if you have a significant number of "worthless" sick leave hours you might schedule physicals, and other medical exams, medical tests, elective surgery, dental work etc. to utilize the sick leave hours that do nothing for your annuity. Don't cut it too close because you might come down with the flu or something the last week or two of work and it would be a shame to lose an entire month of service for annuity computation because you tried to get down to the wire.
Are you retiring with eligibility for immediate retiree coverage for the federal employee health program? If so you receive the same premium subsidy for health care as you do as an employee, so there is no concern over retirement dates that I'm aware of in this area.
Re: Retirement Date Decision, Pros & Cons (Feds)
Go with 5/31. I worked for a government contractor (private pension). HR asked me to pull up my departure a few days to coincide with the end of a pay period (not the end of the month). While I was assured that it would not impact the $ amount of the pension, a few months later I had a claw back taken from one month and it turned out to cost me about $20/month forever.
Re: Retirement Date Decision, Pros & Cons (Feds)
I retired early, and the only date-related wisdom I have is that if I had worked two more days, I'd have received an additional month of health insurance, because in my state it runs to the end of the month you leave employment. I mention I retired early, because it means my family plan health insurance is not cheap, and it was heavily subsidized so there were tax savings versus purchasing directly. I'd probably round the un-subsidized value off at a week worth of work for me.Barefootgirl wrote: ↑Sat Feb 08, 2020 4:00 pm I'm a fed seeking to retire on 5/31. Conventional wisdom suggests this is a propitious date since my pension will then begin 6/1.
Re: Retirement Date Decision, Pros & Cons (Feds)
MnD wrote: ↑Sat Feb 08, 2020 5:37 pm
Suppose you are retiring on May 31, 2020 with 35 years, 6 months and zero days of service and will retire with 500 hours of unused sick leave.
From the table, 500 hours of sick leave converts to 2 months and 27 days of service (you move up to the next bracket if your number of hours falls in between. That means your total service is 35 years, 8 months and 27 days. Anything less than whole months is dropped for computing your annuity so the 27 day credit is "worthless" for annuity computation. You would have received the same annuity if you had retired with 348 hours of sick leave.
so,.... would working four more days have given that person another month for pension service?
I might have to estimate what one more month is worth. I should also find my FERS time and figure it out down to the day.
Re: Retirement Date Decision, Pros & Cons (Feds)
Yes.chalet wrote: ↑Sat Feb 08, 2020 8:04 pmMnD wrote: ↑Sat Feb 08, 2020 5:37 pm
Suppose you are retiring on May 31, 2020 with 35 years, 6 months and zero days of service and will retire with 500 hours of unused sick leave.
From the table, 500 hours of sick leave converts to 2 months and 27 days of service (you move up to the next bracket if your number of hours falls in between. That means your total service is 35 years, 8 months and 27 days. Anything less than whole months is dropped for computing your annuity so the 27 day credit is "worthless" for annuity computation. You would have received the same annuity if you had retired with 348 hours of sick leave.
so,.... would working four more days have given that person another month for pension service?
I might have to estimate what one more month is worth. I should also find my FERS time and figure it out down to the day.
And actually 3 more days worked would do that because for whatever reason, roughly 6 hours of unused sick leave translates to 1 day of additional service per the table.
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