If you’re a FERS employee thinking about retirement, you may have heard that some days of the year are better to retire than others. That’s true, the date you choose to retire can have a meaningful impact on your cash flow, including when your pension begins and how much unused annual leave you can receive as a lump-sum payment.
In this blog, we will cover how your retirement date will affect your first few months of retirement, and examples of some of the most optimal days to retire in 2026 and 2027.
Key Takeaways:
Once you retire as a FERS employee, your retirement date becomes the first of the following month. Your first FERS annuity check then will be sent to you on the first day of the following month after retirement.
For example, let’s say you retired on February 14. Your annuity retirement date would be March 1, and your first FERS annuity check would arrive on April 1.
To complicate matters just a little more, when your first check comes, it will likely only cover 40-90% of your full annuity check as the government reviews and verifies your employment record. The full payments should start shortly thereafter.
For more details on how your FERS benefit is calculated, read our related blog post.
For people who are used to getting paid twice a month, this gap in time can be difficult to navigate.
However, there is a way to get a supplemental paycheck during this time. Within 30 days of your retirement date, the government will send you a cash payout of unused annual leave you had upon retirement. Most retirees use this to pay bills and expenses during the gap between their last working check and their first full annuity check.
Here are two simple actions you can take before you retire to maximize this payout:
Now, you can merge these two simple strategies and retire at the end of a pay period that finishes towards the back of the month.
That means the last day of the month is always a good day to retire, but there are some days that are even better because they allow FERS employees to max out annual leave, which they will receive as a lump-sum cash payment along with their sick time, which will be added to their pension time.
For example, December 31 is always a great date because it creates a clean start for the following year from a financial perspective and allows for maxing out of annual leave and sick time.
The best dates to retire are typically the end of a pay period or the last day of a month, which maximizes annual leave and lines up with TSP and tax benefits. Selecting a date like this allows you to accumulate the max annual leave and they allow for a better tax situation for your first year of retirement.
Best dates for federal employees to retire in 2026:
And for 2027, the best dates for federal employees to retire would be:
The reason for retiring within the last three days of the month is that it also allows a FERS employee to receive their first pension check as quickly as possible. Historically, that can take anywhere from 4-5 weeks but can vary depending on the time of year you retire.
As a federal employee, having a strategic mindset when selecting your retirement date can be one of the most valuable things you can do for your future. Rather than selecting an arbitrary date or one that aligns with social or vacation plans, consider setting it on a date that can help ease the transition into retirement.
If you’re still unsure when is the right time for you to retire, or need other retirement guidance, schedule a free FERS consultation here.
And if you’re looking to learn more about federal retirement benefits, download our guidebook on FERS Made Simple: Understanding and Maximizing Your Benefit.