As they come within striking range of retirement, many feds focus (some would say fixate) on the very, very best day to retire.

Retiring on the so-called best date means an employee can maximize their lump sum leave payment, and get a big tax break on that money.

Example: For higher salary feds and senior executives who've banked lots of vacation time they can, in 2010, carry over the maximum number of leave hours, get paid for most of it at the new (2010) higher pay scale AND get a tax break. What's not to like?

Normally finding the best date to retire is easy. For workers under the Federal Employees Retirement System it is nearly always Dec. 31. For those under the older Civil Service Retirement System it is usually January 1, 2 or 3.

FERS covers about 80 percent of the current workforce, CSRS most of the rest. Most of the people retiring now, and over the next few years, will be CSRS or CSRS Offset employees.

But 2010, as many readers have noticed is different. They asked me to confirm certain things and explain them. Naturally, I punted.

I passed the complex best-date question, from a sharp-eyed IRS worker, Barry Sparks, on to benefits expert Tammy Flanagan. She's with the National Institute of Transition Planning and is the Godmother of The Best Date(s) To Retire issue.

Here's the Q & A. You might want to pass this on to a friend.

Q. Mike, you can be the first on your block to find out the answer to the question most folks have not even considered yet. Next year the last day of the 2010 leave year is technically on Saturday 1/1/2011.

Tammy: This is correct.

Q. I believe based on 5 U.S.C. 6103(b) most Agencies will celebrate the legal holiday on Friday 12/31/2010.

Tammy: Right again.

Q. That creates an unusual situation?

Tammy: Only from the standpoint that if you are under CSRS, you don't want to retire on January 2, or 3 if you are wanting to cash in more than 240 hours of annual leave. Also, you wouldn't want to retire on Saturday, January 1 if you don't want your first retirement check docked by 1/30 of the January payment.

Q. I think if a CSRS person plans on retiring the last day to get the trifecta of the last leave accrual, ability to carry over more than 240 hours of annual leave and the holiday pay without losing 1/30th of the January annuity check they can retire COB 12/31/2010?

Tammy: Correct!! He is smarter than a fifth grader : )

Q. My question, that most people have not considered because they are not as #$%^&-up as me, is if I retire 12/31/2010 and therefore I am not on the rolls on Saturday 1/1/2011 when the real holiday is, do I get the in lieu holiday on 12/31/2010 or not?

Tammy: If you make your retirement effective on a holiday, then you will be paid through close of business which includes the pay for the holiday. So... yes, he would get paid for the January 1 holiday since the government celebrates the holiday on December 31 since the actual holiday is a Saturday.

By the way...the FERS employees will be happy with this situation since they will get the same "trifecta" benefit next year as CSRS employees have been enjoying when the leave year ends on January 1, 2, or 3!

Nearly Useless Factoid
by Emily Jarvis

Almonds are a member of the peach family.

To reach me: mcausey@federalnewsradio.com