Best Dates to Retire in 2026: A Guide for Federal Employees
Find the optimal federal retirement dates in 2026. Complete pay period calendar, leave payout strategies, and pension timing tips for FERS employees.
Your federal retirement date affects more than just when you stop working. The specific day you choose determines your final leave payout, how long you wait for your first pension check, and potentially your tax bill.
Pick the wrong date and you could forfeit hundreds of dollars in leave accrual. Pick the right one and you walk away with maximum benefits.
Here's how to choose the best retirement date in 2026.
Key Takeaways
- May 30/31 and October 31, 2026 are optimal dates, aligning pay period end with month end for seamless pension start
- Annual leave accrues only at the END of pay periods, retiring mid-period forfeits your final 4-8 hours
- January 9, 2027 maximizes leave payout by ending the 2026 leave year
- December 31, 2026 is mid-pay period (loses 8 hours leave) but offers tax advantages for lump sum payout
- Your pension starts the first day of the month AFTER you separate
The Three Factors That Determine Your Best Date
Three timing elements determine how much money you leave on the table, or take with you:
1. End of Pay Period
Annual leave accrues at the end of each pay period only. Not during. Not proportionally. Only at the end.
If you retire on a Tuesday mid-pay period, you get nothing for that final period. Retire on Saturday when the period ends, and you collect your full 4-8 hours.
2. End of Month
Your FERS pension starts on the first day of the month after you separate. Retire March 15, your pension starts April 1. That's a 16-day income gap.
Retire March 31, your pension starts April 1. Zero gap.
3. Leave Year Timing
The 240-hour annual leave carryover limit resets at the end of each leave year. Any leave above 240 hours (your "use-or-lose" balance) is forfeited when the new leave year begins.
Unless you retire first. Separating before the leave year ends lets you cash out your entire balance, even 400+ hours.
Top 5 Retirement Dates for 2026
| Rank | Date | Why It Works | Trade-off |
|---|---|---|---|
| 1 | October 31, 2026 | Pay period end + month end. Pension starts Nov 1. | None, nearly perfect |
| 2 | May 30/31, 2026 | Pay period end (May 30) + month end (May 31 is Sunday). Pension starts June 1. | Minimal gap |
| 3 | January 9, 2027 | End of 2026 leave year. Maximum leave payout. | Pension starts Feb 1 (3-week gap) |
| 4 | December 31, 2026 | Calendar year end. Lump sum paid in 2027 (lower tax year). | Mid-pay period, lose 8 hours leave |
| 5 | January 10, 2026 | End of 2025 leave year. Ready to retire now. | Pension starts Feb 1 |
October 31, 2026: The Best Date
October 31 is a Saturday in 2026 and the end of Pay Period 23. It's also the last day of the month.
- Full leave accrual for your final pay period
- Pension starts November 1, the very next day
- Zero income gap between your last paycheck and first pension
- Avoids the December OPM processing backlog
May 30/31, 2026: Best Mid-Year Option
May 30 (Saturday) is the end of Pay Period 12. May 31 is a Sunday, so retiring May 30 effectively gives you month-end timing.
- Full leave accrual
- Pension starts June 1
- Perfect for those who can't wait until fall
January 9, 2027: Maximum Leave Payout
This is the "power date" for federal employees with high leave balances. January 9 is the end of Pay Period 1 (2027) AND the end of the 2026 leave year.
Example: You have 360 hours accumulated leave (120 hours above the 240 limit).
- Hourly rate: $48.04
- Retire January 9, 2027: Payout = 360 hours x $48.04 = $17,294
- Wait until January 11, 2027: Payout = 240 hours x $48.04 = $11,530
- Difference: $5,764 lost
December 31, 2026: The Tax Strategy Date
December 31 is popular but has a catch. In 2026, it falls on a Thursday, mid-pay period. You forfeit your final 8 hours of leave accrual.
Why do it anyway? Tax planning.
Your leave lump sum payout arrives in January 2027, when your income may be lower (pension only, not salary). If you're in a lower tax bracket in 2027, the tax savings could exceed the lost leave accrual.
Run the numbers for your situation.
Complete 2026 Pay Period Calendar
| Pay Period | End Date | Day | Optimal? | Notes |
|---|---|---|---|---|
| PP 2 | January 10 | Sat | Good | 2025 leave year ends |
| PP 3 | January 24 | Sat | No | |
| PP 4 | February 7 | Sat | No | |
| PP 5 | February 21 | Sat | No | |
| PP 6 | March 7 | Sat | No | |
| PP 7 | March 21 | Sat | No | |
| PP 8 | April 4 | Sat | No | |
| PP 9 | April 18 | Sat | No | |
| PP 10 | May 2 | Sat | No | |
| PP 11 | May 16 | Sat | No | |
| PP 12 | May 30 | Sat | Yes | Month-end (May 31 is Sunday) |
| PP 13 | June 13 | Sat | No | |
| PP 14 | June 27 | Sat | No | |
| PP 15 | July 11 | Sat | No | |
| PP 16 | July 25 | Sat | No | |
| PP 17 | August 8 | Sat | No | |
| PP 18 | August 22 | Sat | No | |
| PP 19 | September 5 | Sat | No | |
| PP 20 | September 19 | Sat | No | |
| PP 21 | October 3 | Sat | No | |
| PP 22 | October 17 | Sat | No | |
| PP 23 | October 31 | Sat | Yes | Pay period + month end |
| PP 24 | November 14 | Sat | No | |
| PP 25 | November 28 | Sat | No | Use-or-lose deadline |
| PP 26 | December 12 | Sat | No | |
| PP 27 | December 26 | Sat | No | |
| PP 1 (2027) | January 9 | Sat | Yes | 2026 leave year ends |
How Your Retirement Date Affects Benefits
Annual Leave Payout
Your accumulated annual leave converts to a lump sum at your hourly rate.
| Scenario | Result |
|---|---|
| Retire end of pay period | Full final accrual (4-8 hours) |
| Retire mid-pay period | Lose entire final accrual |
| Retire before leave year ends | Cash out ALL leave, even above 240 |
| Retire after leave year starts | Only 240 hours carried over |
High-3 Salary Calculation
Your FERS pension is based on your high-3: the average of your highest 36 consecutive months of basic pay.
If you recently received a promotion, step increase, or if the 2026 pay raise just took effect, retiring later gives more months at your higher salary to factor into the calculation.
Note: The 2026 federal pay raise was 1% (base pay only, no locality increase). If your salary has been stable for 3+ years, timing has minimal impact on your high-3.
Use our High-3 Calculator to see how different dates affect your average.
FERS Supplement Eligibility
The FERS Supplement bridges the gap between retirement and Social Security eligibility at age 62. Not everyone qualifies.
| Retirement Type | FERS Supplement? |
|---|---|
| MRA + 30 years | Yes |
| Age 60 + 20 years | Yes |
| Age 62 + 5 years | No (eligible for SS) |
| MRA + 10 (reduced) | No |
| Deferred | No |
| VERA (early out) | Yes, but starts at MRA |
If you're approaching MRA with 30 years or age 60 with 20 years, waiting a few months could qualify you for the supplement.
The 62+20 Bonus
Retiring at age 62 or older with 20+ years of service increases your multiplier from 1.0% to 1.1%. That's a 10% pension increase for life.
Example:
- High-3: $100,000
- 30 years service
- At age 61: 30 x 1.0% x $100,000 = $30,000/year
- At age 62: 30 x 1.1% x $100,000 = $33,000/year
The $3,000 per year difference means if you wait one year (forgoing $30,000 in pension), you break even in 10 years and come out ahead for every year after.
Critical 2026 Dates Timeline
| Date | Event | Action |
|---|---|---|
| January 10, 2026 | 2025 leave year ends | Last day to retire for 2025 leave payout |
| January 11, 2026 | 2026 leave year begins | |
| May 30-31, 2026 | Best mid-year date | Pay period + month end |
| October 31, 2026 | Best fall date | Pay period + month end |
| November 28, 2026 | Use-or-lose deadline | Schedule excess leave by this date |
| December 31, 2026 | Calendar year end | Tax strategy option |
| January 9, 2027 | 2026 leave year ends | Maximum leave payout date |
Calculate Your Optimal Date
Your best retirement date depends on your specific situation. Use our free calculators to model different scenarios:
- FERS Retirement Calculator: See how timing affects your pension
- High-3 Calculator: Verify your average salary is maximized
- Federal Leave Optimizer: Plan your leave payout strategy
Frequently Asked Questions
What is the best date to retire from federal service in 2026?
The top recommended dates are May 30/31 and October 31, 2026, because they align the end of a pay period with the end of a month. This ensures you receive full leave accrual AND your pension starts the very next day (June 1 or November 1). If maximizing your annual leave payout is the priority, January 9, 2027 (end of the 2026 leave year) allows you to cash out all accumulated leave, even amounts above the 240-hour carryover limit.
Why does retiring at the end of a pay period matter for federal employees?
Annual leave accrues only at the END of each pay period, not throughout it. If you retire mid-pay period, you forfeit that entire period's leave accrual, typically 4 to 8 hours depending on your years of service. Over a career, this can mean losing valuable leave worth hundreds of dollars. Always verify your pay period end dates with your agency's payroll calendar.
What happens to my annual leave when I retire from federal service?
Upon retirement, you receive a lump-sum payment for all unused annual leave at your current hourly rate. This includes any hours above the 240-hour carryover limit that you would otherwise forfeit at the end of the leave year. If you have 400 hours accumulated and retire before the leave year ends, you get paid for all 400 hours. If you wait until after the new leave year starts, you only get paid for the 240 hours that carried over.
Does my retirement date affect my high-3 salary calculation?
Yes, potentially. Your high-3 is the average of your highest 36 consecutive months of basic pay. If you recently received a promotion, step increase, or if the annual federal pay raise just took effect, retiring a few months later could increase your high-3 average. However, for most employees whose salary has been stable, the impact is minimal.
Is December 31 a good date to retire from federal service?
December 31 is popular but NOT optimal for leave accrual. In 2026, December 31 falls on a Thursday, mid-pay period, so you forfeit your final 8 hours of leave accrual. However, there is a tax advantage: your annual leave lump-sum payout will be paid in January 2027, potentially landing in a tax year when your income is lower. If tax savings outweigh the lost leave accrual, December 31 may still make sense for you.
When does the 2026 federal leave year end?
The 2026 leave year ends on January 9, 2027 (a Saturday). The 2026 leave year begins on January 11, 2026 and runs for 26 pay periods. If you want to maximize your annual leave payout, retiring on January 9, 2027 allows you to cash out all accumulated leave from the entire 2026 year, including any use-or-lose hours above 240.
Does my retirement date affect whether I get the FERS Supplement?
Your retirement date matters in terms of when you meet the eligibility requirements, not the specific day of the month. To receive the FERS Supplement, you must retire with an immediate, unreduced annuity, typically MRA with 30 years of service or age 60 with 20 years. If you are approaching one of these milestones, waiting even a few months could qualify you. The supplement then continues until you reach age 62.
What is the FERS 62+20 bonus and should I wait for it?
If you retire at age 62 or older with at least 20 years of service, your FERS multiplier increases from 1.0% to 1.1%, effectively a 10% increase in your pension for life. This bonus is only available if you meet BOTH conditions at retirement. If you are 61 with 20+ years, waiting until 62 could significantly increase your lifetime pension payments. Calculate your break-even point using the FERS Calculator.
How much annual leave do I earn each pay period as a federal employee?
Annual leave accrual depends on your years of service. Less than 3 years: 4 hours per pay period (104 hours/year). 3-15 years: 6 hours per pay period (160 hours/year). 15+ years: 8 hours per pay period (208 hours/year). Leave accrues at the END of each pay period, so retiring mid-period means losing that entire period's accrual.
How can I calculate the best retirement date for my situation?
Use the FedTools FERS Retirement Calculator to model different retirement dates and see how they affect your pension amount. Input your high-3 salary, years of service, and retirement age to see your estimated annuity. Then use the Federal Leave Optimizer to understand your annual leave situation and the High-3 Calculator to ensure you are maximizing your average salary.
Related Resources
- FERS Retirement Calculator: Model your pension with different dates
- High-3 Calculator: Calculate your average salary
- Federal Leave Optimizer: Maximize your leave payout
- FERS Guide 2026: Complete guide to FERS retirement
Sources
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