best day in year to pull the plug?

[joeea]

What day in the year do folks find best to retire?

Today.

I retired at the end of my company's fiscal year - solely because it happened to align with the end of a big, multi-year project I wanted to help my team get through.

Some told me that I was crazy not to stick around until bonuses were handed out. That typically happened a few months after the books were closed. For me, worrying about details like that would have kept me in "one more year" mode essentially forever, so I left as I had planned.

I was pleasantly surprised a few months later to receive a nice bonus check (15% of my annual salary) when others got theirs.

Sometimes, you just have to leave and not worry about optimizing.

 

[GalaxyBoy]

In my opinion the best day to retire is yesterday. Seriously though, don't discount the value of your freedom in exchange for a few thousand dollars or getting paid for one lousy holiday.

OTOH some good advice above, especially timing it at the beginning of a month for health insurance.

Consider if it's likely you would be shown the door upon giving notice if you announce too early. It's also possible you could work off your backlog and have little to do for the last weeks or months. I've seen that happen.

Whether or not your separation meets your company's definition of "retirement" might be relevant to decoding your policy manual. When I used the "R" word with HR it totally confused them as I didn't have the necessary tenure or minimum age.

 

[6miths]

i left end of April. I just wanted to be ready for gardening season and the good weather. Guess I shouldn't have broken my ankle a week after retiring! Rats!

 

[Sunset]

Remember to spend all your FSA if you have one, even if you have not contributed much towards it as it's calculated on the entire year. (it's like a freebie).

Once I maxed my 401K to 80% of my salary, as I was leaving a job in months.

 

[Jerry1]

have your last day on the 1st of the month so you get that month's insurance covered. Also cobra may be less expensive than alternatives depending upon your specific situation.

^^ This ^^ - Plus of course after all other considerations you mentioned.

 

[Popeye]

As usual I have a story.

This needs to be your epitaph. No rush, of course.

 

[Clone]

have your last day on the 1st of the month so you get that month's insurance covered.

And. as I have posted before someplace, you really need to understand how everything works at the place you are retiring from.

With my pension, they pay once per month, on the 1st. If you retire on the 1st, it is a month until your first pension check. If you retire on the last day of the month, you get your first pension check the next business day. In my case, I get retiree health benefits, so there was no coverage gap. So I would suggest that you look at the interaction of when your pension check starts and when you start paying for health insurance.

In OPs case, I would pick up that April bonus, and give notice in May. The end of the year stress is easier to shake off when you are under 6 months to go.

 

[gamboolman]

Remember to spend all your FSA if you have one, even if you have not contributed much towards it as it's calculated on the entire year. (it's like a freebie).

Once I maxed my 401K to 80% of my salary, as I was leaving a job in months.

Thanks for this reminder

I am planning on end of year but if I did change the date to earlier in the year - we could lose out

 

[FIREd]

For DW, we picked a date which was 1) after the annual bonus was paid, 2) after one more round of RSUs and stock options vesting (just a couple of weeks after the bonus was paid), and 3) on the first of the following month to get an extra month of paid health insurance - in our case we were not interested in COBRA ($$$), so the extra month bought us enough time to find new coverage.

 

[CaptTom]

LOL, that's exactly what I faced with my MegaCorp retirement:

Wait for:

January and you got in another calendar year.
April and you got the annual bonus.
July and you got your full years' vacation time.
Later in the year and your years of service started rounding up.
Whatever month your birthday rounded up to another year in age.
Then there were special projects you wanted to finish, or avoid.

There was never a good time to retire. Most people put in their notice right after the bonus check cleared, got the summer off but left a little vacation time on the table.

 

[athena53]

I left in May when politics got toxic. I wanted to mention that my company terminated the health insurance immediately- my last day was in the middle of the month. I should have negotiated better but that was never my strong suit. I asked HR why I didn't get a refund of the premium for the last half of the month (we pay in advance) and was told that people who start in the middle of the month are covered immediately so it all evens out. Not happy with having to wait for COBRA sign-up papers to arrive in the mail from a third-party company with a sprint triathlon in the meantime. Fortunately I didn't fall off my bike. Of course, this is the place that also wanted $500 for an 18-month old iPhone when the next generation was just coming into the stores. (I let them keep it and bought my own.)

So- make sure you know how long you'll have insurance.

There are also companies (Chubb comes to mind) where ALL of the 401(k) match for the year gets deposited on December 31. You're not there, you don't get anything.

 

[Senator]

I had a pension that needed 1,000 hours to get another year. Working the first day of a month gave me that's month's vacation hours and healthcare. Work one day, get paid for three. Look at my signature line below to see my checklist...

securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday.

 

[Maenad]

OP, in your situation I would recommend either working through the December crunch and retiring on Jan 1, or retiring in May so that your company can get a replacement up and running by the December crunch. If you take off around Thanksgiving you're just going to make it worse for your coworkers who have to pick up the extra work until your backfill is in place.

This assumes, of course, that your coworkers are worth the consideration. In my circumstance, at this time, they would be, so I'm projecting a little.

 

[pb4uski]

Where I worked we had a June 30 year end and annual bonuses were paid in September. I gave my notice shortly after our bonuses were paid. I negotiated to stop working just before Christmas and to go on vacation until February 1.

It worked out perfectly for me... I got the Thanksgiving, Christmas and New Year holidays.... continued to accrue vacation and get health insurance benefits.

I changed my 401k deduction to 100% of my pay so my pay for the month of January and unpaid vacation in my final paycheck essentially went into my 401k and I had no taxable income from earnings in the year that I retired.

So I suggest that you focus on getting your bonus and minmizing your taxable income from earnings for the year that you retire.

 

[ls99]

The perfect day for that is when really crappy assignments are being handed out in a group setting.

Of course one must have a prepared resignation letter in pocket, preferably a bit crumpled but unsigned.

Then at the appropriate moment pull it out, make the announcement in a firm voice and make big show of signing it and handing it to the boss.

Which is exactly what I did.

The dropped jaws are a sight to behold, as is the deadly silence. Priceless.

 

[W2R]

The best day to retire, is the first possible day when you CAN retire.

There is always another reason to wait a couple of months, but none of those reasons are as good as retirement.

Take my story, for example. Personally I retired on November 9th, 2009.

**** Everyone said I should wait until the new year (January, 2010), to get a step increase and a couple of extra bucks in my pension.

**** Then they said January 1st wasn't soon enough, that I should wait until I could contribute fully to my retirement accounts for the new year.

**** By then, I would have been close to my 62nd birthday (in June, 2010), and could get a bump up in my pension if I just waited until then.

I told these co-workers that I was retiring because time was more important to me than money at that time, and then I went ahead and retired. I have not regretted that for even one minute.

Life is short, so allow yourself plenty of time to enjoy retirement.

 

[scrabbler1]

And. as I have posted before someplace, you really need to understand how everything works at the place you are retiring from.

With my pension, they pay once per month, on the 1st. If you retire on the 1st, it is a month until your first pension check. If you retire on the last day of the month, you get your first pension check the next business day. In my case, I get retiree health benefits, so there was no coverage gap. So I would suggest that you look at the interaction of when your pension check starts and when you start paying for health insurance.

In OPs case, I would pick up that April bonus, and give notice in May. The end of the year stress is easier to shake off when you are under 6 months to go.

Sometimes, the pension is per quarter, not month, making it more important to carefully choose the right day (or avoid choosing the wrong day). I know 2 people who chose their retirement dates carefully to optimize this. The first was my dad, who in 1994 changed his last day from July 1st to June 30th so he would receive his first pension check in July instead of having to wait until October. The second was a retiring coworker who in 2003 chose September 30th so he could begin receiving his pension check in October.

My company froze its pension back in 2001 so I stopped getting any pension credits for the last 7 years I worked. I can't start collecting until I turn 65, 11 years from now. It is one of the "reinforcements" in my overall financial plan.

 

[Dash man]

I gave three months notice by sending out a Happy New Year email at 8:00 am on the first work day back after the new year. I also included the dates for three weeks of vacation in February figuring by the time I came back all I'd have to do is train my replacement. My last day was Friday, March 29, 2013. My replacement was trained and I didn't let the door hit me on the way out.

 

[Scuba]

I didn't know about this when I pulled the plug. But I happened to do this so I got an extra month of coverage which was a pleasant surprise.

+1

 

[DrRoy]

For me it was the end of March. That was after the annual bonus and just as the weather was getting better for outdoor projects.

 

[badatmath]

Remember, working one day in a month gets you coverage until the last day of that month.

Verify your employer works like this. Mine does not. If I messed it up I would lose it altogether. I do plan to take my zillion PTO days to stay on the books longer. . . if I get that far. Much uncertainty in my job world right now with layoffs and relocations.

 

[GalaxyBoy]

Verify your employer works like this. Mine does not. If I messed it up I would lose it altogether. I do plan to take my zillion PTO days to stay on the books longer. . . if I get that far. Much uncertainty in my job world right now with layoffs and relocations.

It's important to study your employer's policy manual, the 401(k) plan documents, etc. to determine exactly what the rules are. I bounced around a bit over the years and learned that one can't always trust what one is told verbally. That was typically more out of ignorance or misunderstanding on the boss's or HR's part rather than anything deliberate.

 

[Senator]

Do not forget the day you quit work, doesn't have to be the day you retire...

I quit asking for assignments, and started making the work I had assigned last the entire day, about two years prior to actually leaving.

Most often, after you unofficially announce your retirement, they do not want to give long term project work to you, as the turnover when you leave is harder.

 

[Montecfo]

April Fools Day was my last day. Everyone thought my ER announcement was a joke...the joke was on them!

But in all seriousness, I also did not give notice until my annual bonus was posted in my bank account. It posted shortly after lunch and I gave my notice before leaving that night. I did use my vacation time rather than getting paid out so as to stretch the number of months on the company's health plan. Remember, working one day in a month gets you coverage until the last day of that month. I also timed it during a lull in the calendar so no one would be left in a lurch during a busy time (I worked in Finance so projects were cyclical).

Giving notice on April 1 seems good. Last Day May 1. Get insurance paid month of May. Enjoy the summer.

 

[LRDave]

Thanks to this thread, I may abandon my OCD-esque target of Dec. 31, 2017 for Jan.3, 2018 - to get paid two days holiday plus extend employer-supplemented HI for that month.