What to know before setting your 2026 retirement date

It’s time to think about retirement for those of you who didn’t take the Deferred Resignation Program options in 2025 but are getting ready to retire sometime in 2026.  Let’s break down the rule that decides when your retirement kicks in:

Immediate* Voluntary (CSRS, CSRS Offset, and FERS) retirement benefits commence the first day of the month after you separate from service and you have met the age and service requirements.  

*An “immediate” retirement is one that begins within 31 days of your separation from federal service. The opposite of an “immediate" retirement is called a “deferred” retirement.

Example: If you retire (and are eligible to retire) on June 30, 2026, your first retirement benefit is payable for the month of July (the July payment would be dated Aug. 1 since retirement benefits are paid on the first of the month for the previous month).  Likewise, if you retire on June 15, 2026, your first retirement benefit is payable for the month of July. You would not receive any compensation for June 16 – 30 since, after all, you retired close of business June 15.  For this reason, the last day of the month is always considered a “best date” to retire.

Here is one more thing to know if you will be retiring under the CSRS or CSRS Offset retirement coverage:  

If you are retiring under CSRS or CSRS Offset, the annuities of employees who serve in pay status for three days (or fewer) in the month of retirement commence on the day after separation or the day after pay ceases and the age and service requirements are met. 

Example: If you’re retiring under CSRS (or CSRS Offset) with a date of separation of March 3. Your CSRS annuity will commence on March 4. For purposes of applying the 3-day rule, all days – including non-workdays – are used to determine how many days an employee is in a pay status during a month. This means that if you retire on Sunday, May 3 instead of Friday, May 1, your first retirement payment would be 27/30 of your May benefit rather than 29/30 since the Office of Personnel Management will pro-rate your first payment if you take advantage of the three-day “grace period.” So, if your monthly benefit is $3,000/month, the May payment would be $2,700 if you retire on May 3 and $2,899 if you retire on May 1.   

Next week, I will provide you with the 2026 calendar with the best dates highlighted, but for this week, let’s look at the end of each month in 2026 since those are the “best dates” to retire:

• Jan 31 falls on a Saturday and is in the middle of leave period #2.  If you work a Monday through Friday work schedule, you could retire on Jan. 30.  You would accrue leave through leave period #1 that ends on Jan. 24.     
• Feb. 28 falls on a Saturday and is in the middle of leave period #4.  Even if you work on a M-F work schedule, retire on Feb 28. For retirement computation purposes, all months have 30 days. No credit is given for the 31st day of the month. The 28th day of February constitutes three days (or the 29th day of February constitutes two days). Without going into details on how to subtract dates, take my word for it, choosing Feb. 28 and the “extra 3 days” may give some of you an extra month in the calculation of your retirement.  
• March 31 falls on a Tuesday and is sevendays into period 6. Some of you may decide to retire on March 27, but you would miss out on the final two days of salary (Monday and Tuesday) in the month of March. Your retirement will begin in April either way!
• April 30 falls on a Thursday and is only one day short of completing the two-week pay period for employees who work Monday – Friday.  If you work a compressed work schedule and finish your 80 hours of work on Thursday, then on April 30th you will accrue your final leave accrual for completing leave period #8 (you don’t have to retire on a Saturday).  

If you are retiring under CSRS or CSRS Offset, you can retire on May 1st and still receive 29/30 of the May retirement benefit and a final leave accrual for leave period #8 even if you aren’t on a compressed work schedule.  

• May 31 falls on a Sunday, while Saturday, May 30 or even Friday, May 29 could be considered great retirement dates since they would accomplish retiring near the end of the month and would allow you to finish your 80 hours of work by the end of leave period #10.  
• June 30 falls on a Tuesday and is only three days into leave period #13. Some of you may decide to retire on June 26, but you would miss out on the final two days of salary (Monday and Tuesday) in the month of June.  Your retirement will begin in July either way!
• July 31 is a Friday, but it is the end of week one of leave period #15. You would accrue leave through leave period #14 that ends on July 25.     
• Aug. 31 falls on a Monday in the 2 week of leave period #17. Some of you may decide to retire on Aug. 28, but you would miss out on the final day of salary (Monday) in the month of August. Your retirement will begin in September either way!
• Sept. 30 falls on a Wednesday in the second week of leave period #19. Some of you may decide to retire on Sept. 25, but you would miss out on the final days of salary (Monday-Wednesday) in the month of September. Your retirement will begin in October either way!  

If you are retiring under CSRS or CSRS Offset, you can retire on Friday, Oct. 2 and still receive a 28/30 of the October retirement benefit.

• Oct. 31 falls on a Saturday at the end of leave period #21. This is a great day to retire as you will earn leave for the last pay period that you worked, and it is the last day of the month!  If you work on a Monday through Fridayschedule, go ahead and retire on Friday, Oct. 30.  
• Nov. 30 falls on a Monday and is the second day of leave period #24.  Some of you may decide to retire on Friday, Nov. 27 or Saturday, Nov. 28, but you would miss out on the final day of salary (Monday) in the month of November. Your retirement will begin in December either way and you will accrue leave through leave period #23!  
• Finally, Dec. 31 falls on Thursday in the first week of leave period #26, the final leave period of 2026. This is a day when employees can be paid for all their accumulated and accrued leave that they carried over from 2025 and accrued during 2026. The payment will be made in the 2027 tax year and although the first 48 hours (Jan. 1 and Jan. 4 toJan. 8) would be paid at the 2025 pay rate, any remaining hours would benefit from the potential pay increase that would take effect on Sun., Jan. 10, 2027 (the first day of the 2027 leave year).  
• If you are retiring under CSRS or CSRS Offset, you can retire on Fri., Jan. 1 and still receive a 29/30 of the January retirement benefit (I know that January has 31 days, but according to OPM, all months have “30” days for retirement purposes). Since it is a holiday, you won’t even have to report to work that day!
• Jan. 9, 2027, is a Saturday and the end of leave period #26 in the 2026 leave year. This date isn’t for everyone because you would be trading in the January retirement payment in exchange for an additional 6 days of salary (Jan. 1 and Jan. 4 to Jan. 8) along with a final leave accrual for completing leave period #26. Your retirement wouldn’t commence until Feb. 1 but consider whether the tradeoff might be worthwhile.  

Example: For example, let’s say Joe’s salary is $131,826 / year or $63.16/hour ($131,826/2087 hours).  

By retiring on Jan. 9, Joe would earn his salary for those 6 days (48 hours) of pay after Dec. 31. This would be worth a gross amount of $3,031.68.  In addition, Joe would accrue an additional 8 hours of annual leave for leave period #26. This would be worth an additional $505.28 (8 hours x $63.16/hour).  

If Joe retired with 20 years of service at age 60 with a high-three average salary of $124,000, his retirement would be worth 1% x 20 x $124,000 or $24,800/year or $2,066/month.  

As you can see, he is giving up a retirement benefit of $2,066 in exchange for extra compensation worth more than $3,500.  

Next week, the 2026 calendar will be published with the “best dates” highlighted so you can begin to visualize and plan for your retirement countdown!