When Is the Best Time of the Year to Retire?

The best time of year to retire depends on several factors, including how an employer awards personal leave time and whether an employee plans to file for Social Security benefits. For instance, when organizations award leave days every few months, employees can maximize the payout for their accrued vacation and sick days by retiring just after the most recent leave award, notes Government Executive magazine.

An employee’s decision to file for Social Security benefits has a large impact on the choice of when to retire, according to Chicago Tribune. Individuals who collect Social Security before their full retirement age may face a reduction in benefits if they earn too much in the year they file, which makes it advantageous to retire early in the year. Those who wish to file for Social Security at the beginning of a new year maximize their earnings by retiring later in the previous year.

In addition to choosing the best time of year to retire, employees should consider which day of the month to retire, advises Government Executive magazine. The federal government bases pension payments on how many whole years and months an employee works, and partial months are rounded down. In the case of an employee who retires after working 30 years, 10 months and 28 days, the government doesn’t award service credit for the last 28 days.