Target Retirement Month

[Al18]

In my case, I worked the last 3 months at 20 hrs per week over 2 1/2 days. It gave me a sense of being retired.

 

[scrabbler1]

I know 2 people who made sure their retirement dates did not intrude into the first day of a new quarter because that would delay them from receiving their first pension checks.

The first was my dad. Back in 1994, he was going to retire on July 1st, but when he learned that would delay his first pension check because he worked for one day in the third quarter, he backed up his retirement date to June 30th. He was 63.5 at the time, so retiring when he did (one day didn't matter) and going on COBRA kept him and my cancer-stricken mom fully insured without interruption until he became eligible for Medicare. Sadly, she passed away in October, 1995.

The second was a coworker. Back in 2003, he was going to retire October 1st, but when he learned that would similarly delay his first pension check for the same reason, he backed up his retirement date to September 30th.

But, sometimes working one day into a new month can be helpful. For me, when I reduced my weekly hours worked from 20 to 12 back in 2007, that was set to start Monday, June 4th. I expected to go on COBRA that week. However, because I was still working 20 hours a week on June 1st, I remained eligible for the group health plan the entire month of June, delaying the need to begin COBRA until July, and kept me on COBRA through the end of 2008 whether I was working there or not (I left at the end of October).

 

[Jeffman52]

For DW and I (we both w**k at the same place) it will be a May retirement. This is our last OMY and we are committed to retire next May.


April is when bonus's pay out and we would only leave after that payout. The last few years the bonus's have been worth waiting for.


Personally I would put my notice in tomorrow, but DW wants this last year so here we go. Maybe she will have a really bad day at Corp America and come home and tell me that she is done with that place!

 

[Koolau]

I retired when they gave me an assignment I didn't want. All benefits (bonus, vacation, etc.) were prorated. I'm still thankful that a retiree health supplement was included. I am blessed. I didn't need to make any special retirement date calculations.

 

[EastWest Gal]

I chose my date based on weather as well. I did lots of OMY. The first time was my 55th birthday, in September. Another beautiful time of year to stop working. The final time was May 1st. I got one entire month of health insurance for working that one day. And that was definitely about the weather.

 

[Andre1969]

In the past, I always had April as my goal, for a few reasons. First, my birthday is in April, so it would be like a birthday present to myself. I also look at springtime in general as a time of rebirth/awakening, and optimism, so I figured retiring then fit in well. I tend to get more moody/depressed in the fall and early winter months, so I wanted to associate my retirement with something a bit more optimistic.

On the financial front, at work we usually get a bonus in March. And whatever pittance of a raise we get takes effect the first paycheck in April. So, any leave I have accrued would be paid out at the higher, post-raise rate. That would also give me enough W2 income to contribute the max to my Roth IRA for that year. Plus, some additional 401k contributions.

But, the older I get, the less relevant April really seems. I've noticed that my mood has leveled out a bit. I'm not as moody in the fall/winter, nor as euphoric/optimistic in the spring. So whatever month I retire, I think I'll be happy to just be retired! I think the whole telecommuting thing for the past three years is what helped me, with this mindset.

And, those bonuses at work are usually around $850-1000. The raises have been 3%, for years now. In the overall scheme of things, it's not enough money to quibble over. And if it was, then that might be a sign I'm not really ready to retire! I guess I just don't like the idea of leaving money on the table. Although no matter when you retire, you do that.

I have a feeling that my month will still be April, of whatever given year. Even though that particular month doesn't seem as pivotal as in the past, I still get a little bit excited when it approaches, and once it's past, the urge to retire does subside a bit.

I could see me waking up one morning though, and deciding right then and there, "enough". It will probably be a Wednesday, because that's the one day a week I'm supposed to go into the office! I should be getting ready for work now, but yet, here I am...

 

[Poopycat]

I’m still torn on exit date. We don’t have a vacation bank, it’s one of those “flexible” time off policies where you take what you need, so there’s no payout.

I had planned to stay til Aug 1 so I could get two years in with the company (just wanted to end on a bit of a high note). But I’m taking a trip in August so I figured I might as well work through August so I can get a paid vacation.

I have thought about end of October so that another portion of my RSU’s would be vested. Not a huge amount of money but it would pay for a good portion of some repairs and updates I need to make on my condo so I have a better chance to sell. I could also avoid having to suffer through commuting during the winter.

Or I could leave at the end of February after annual bonuses are paid out. But I don’t know whether it’s worth it to do so because our bonuses sucked this year and I anticipate next year being bad payouts too.

It may be that I call it quits when something finally pushes me over the edge and I just don’t want to come into the office anymore.

 

[srblanco7]

Targeting early May for retirement (or transition to casual part-time) - noting that I'm required to provide 3 months notice. Reasons as follows -
1. Annual incentive comp distribution takes place in mid to late April
2. Should allow me to accumulate another year of maxed SS
3. Have stock options that vest on May 1
4. Want to retire into good weather / golf season

 

[KrisQuit]

Note: in most cases, retiring the first of the month makes the most sense, as you would qualify for that month's medical insurance for the entire month -- worth saving a few $$$s on the way out.

 

[G-Man]

Targeting early May for retirement (or transition to casual part-time) - noting that I'm required to provide 3 months notice. Reasons as follows -
1. Annual incentive comp distribution takes place in mid to late April
2. Should allow me to accumulate another year of maxed SS
3. Have stock options that vest on May 1
4. Want to retire into good weather / golf season

Please explain "accumulate another year of maxed SS".

 

[cnocmmz]

I made my last day December 1st. My vacation time payout carried me through the end of the month and was able to keep my health insurance through the end of the year also.
Then January 1st started a fresh new tax year.

Yep…Did the same

 

[Andre1969]

Please explain "accumulate another year of maxed SS".

Just a guess, but I wonder if they're a highly-compensated employee, and make enough that they actually hit the max SS threshold in mid/late April? I think it's around $160K for 2023.

I'll never make enough to break the SS threshold, but I'm at least to the point where I hit 35 years of SS wage income in 2020. So to calculate my SS benefit, they don't have any zero years in there at least. And I only have to work a few months into the new year, to make enough that it would replace one of those low-earnings years.

So maybe they're in a similar situation?

 

[G-Man]

Just a guess, but I wonder if they're a highly-compensated employee, and make enough that they actually hit the max SS threshold in mid/late April? I think it's around $160K for 2023.

I'll never make enough to break the SS threshold, but I'm at least to the point where I hit 35 years of SS wage income in 2020. So to calculate my SS benefit, they don't have any zero years in there at least. And I only have to work a few months into the new year, to make enough that it would replace one of those low-earnings years.

So maybe they're in a similar situation?

I'm in the same situation. I have 35 years of earnings. Each year I work now replaces one of the low earning years with indexing applied.

 

[Sunset]

That's a great point. Our contribution limits reset on July 1 so I will have those 6 months to max out my contribution for that last year. I usually front load all my contributions anyway so I get the full year impact.

You may want to make a large amount of it ROTH 401K contributions if you have that available, since the yearly income will be low the last year, and most folks find they have way too much in IRA and little in ROTH accounts.

 

[Koolau]

You may want to make a large amount of it ROTH 401K contributions if you have that available, since the yearly income will be low the last year, and most folks find they have way too much in IRA and little in ROTH accounts.

Yes, Roth to the max - from someone who regrets emphasizing tax-savings-of-the-moment investment in non-Roth tIRAs (Roth 401(K) not available to me back in the day.) But YMMV so do your own homew*rk.

 

[SJhawkins]

Have a few years yet but current thinking is April for many reasons already posted, the most important one being the weather living in the snow belt with spring and fall my to two favorite seasons.

 

[Al18]

Keep in mind your month to retire may not align with your employer. If you are retiring early, I think it’s best not to leave any money on the table.

 

[srblanco7]

Please explain "accumulate another year of maxed SS".

Apologies for the shorthand. My 2024 earnings - given incentive comp payment in April - should be enough to hit the SS earnings limit for 2024. This will replace a lower earnings year as I have 35 years working, but my early years were low earnings years.

 

[1242Vintage]

My retirement month wasn’t planned at all. Had my annual performance review with my CEO and all was excellent. Performance targets met, good profit-margin, client feedback good, etc.

As the conversation was winding down these words came out of my mouth …. “How much lead time do you need before I retire?”

He asked for six months and we negotiated that down to six weeks. Done.

Truly I wasn’t planning the best month to go, it just happened and totally happy how it worked out. I was done, knew it, and flipped that switch for retirement.

Afterwards I called my wife to explain what I just did and booked a flight home!

 

[Alex The Great]

He asked for six months and we negotiated that down to six weeks.

Well my plan is to give two weeks notice for retirement date. I'm not sure what would be the reason to negotiate so much time assuming everything else is aligned. When they decide to layoff they do it right away.

 

[Gumby]

On May 31, I will complete 4 years of retirement. Our choice of timing (as far as the month goes) was primarily dictated by the young wife. She was a public high school teacher and never would have retired during a school year. So, in 2019, she retired at the end of the last day of school in June and I retired about two weeks before her, because for my former employer, you needed to begin your retirement on the first day of a month (yes, there is a pension and retiree healthcare involved). Two weeks was about the maximum amount of time that the young wife would have tolerated me being at home while she was still working.

 

[Koolau]

Well my plan is to give two weeks notice for retirement date. I'm not sure what would be the reason to negotiate so much time assuming everything else is aligned. When they decide to layoff they do it right away.

I suppose it all depends upon your relationship with the company and especially with direct supervision. Though I left with essentially 3 day notice, I had lots of vacation to use and told the boss (whom I liked a lot) that he could call me any time until my final day (technically) still empl*yed. Even after that, I would have helped if I could. I just wasn't gonna do anything I didn't want to do. YMMV

 

[ncbill]

Apologies for the shorthand. My 2024 earnings - given incentive comp payment in April - should be enough to hit the SS earnings limit for 2024. This will replace a lower earnings year as I have 35 years working, but my early years were low earnings years.

Those early years get indexed.

One poster I read (either here or over on bogleheads forums) stated his high-school earnings had been indexed almost 6x!

 

[madatrub]

Here's salary indexing by year:

 

[Koolau]

^^^^^^^

Heh, heh, my friend in Africa didn't get indexing - though he needed it much more than we do. I think his equivalent of SS sends him about $2/month. If you ever need something to be thankful for, think on that for a couple of minutes - and then give thanks.