How to Pick the Right Retirement Date

Make sure your retirement date doesn't cause you to leave money on the table. Here's what to consider.

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Employer 401(k) matches and bonuses. Most employers match contributions throughout the year, says Carol Sladek, head of work-life consulting at Aon Hewitt, but a few make a single contribution in December. Profit-sharing and bonuses are generally awarded at year-end. If you're due a cash payment, set your retirement date accordingly.

Unused vacation. At most companies, vacation days accrue over the course of a year. To get paid for any days you didn’t use, retire at the end of the year; otherwise, you may not be compensated for those days. If your employer is one of the few that still allots your full vacation at the beginning of the year and lets you take it at any time, ask your benefits manager whether you’ll be fully compensated by retiring after January 1.

Medical benefits. Be sure to use all the money you’ve contributed to your medical flexible spending account before you leave the company; otherwise, you’ll lose it. While you’re still on employer group coverage, take care of doctor visits and necessary medical procedures.

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Jane Bennett Clark
Jane Bennett Clark
Senior Editor, Kiplinger's Personal Finance
The late Jane Bennett Clark, who passed away in March 2017, covered all facets of retirement and wrote a bimonthly column that took a fresh, sometimes provocative look at ways to approach life after a career. She also oversaw the annual Kiplinger rankings for best values in public and private colleges and universities and spearheaded the annual "Best Cities" feature. Clark graduated from Northwestern University.