How to Maximize Your Annual Leave Payout
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- เผยแพร่เมื่อ 2 มิ.ย. 2024
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I work for the post office. We get 520 hrs this year
I’m planning my finances and not counting on AL. I’m taking that time before retirement. Every day commute, the bs from management, the unrealistic expectations, doesn’t worth the check after. Some people collapse after retirement because of the exhaustion and stress of many years. Take care and plan accordingly.
As Dallen says, if you retire at the end of the year and have unused annual leave, you are required by law to be paid using any pay increase that happens at the beginning of the year. It should not be paid using your hourly rate when you retired. I retired from GS USAF 31 Dec 2022 and my annual leave payout was not calculated that way. I had to file 2 congressionals to get AFPC to correct it after 4 months. Everyone at local finance, AFPC, and OPM were adamant that I was not correct. It is by law written in Title 5 CFR - Administrative personnel - Chapter 1 OPM - subchapter B - CSR. PART 550 Pay Administration (General) - para 550.1204. Good luck and enjoy retirement.
Retiring end of 2025, hoping to cash out about 50 hours of annual leave :)
I don’t know if I would like to retire at the end of the year. 1) you’re one and thousands who are retiring at that end of the year and given the wait time could be several months for your pension check to kick in. 2) I don’t think I can go a year without enjoying time off although I could use sick leave but not in the same way as AL. 3) payout equals huge taxes.
It’s all about quality of life, for me at least.
my plan is to retire end of December 2028. i’ve been carrying a balance of 240 hrs of AL at end of each year. max is 240 + 208 but will take at least about a week off plus a few days my last year so figure about 390-400 hrs to cash in. yes it will get taxed, no way around that
Post office we can Carry 520 hours. I will cash that in. I have already saved it.
Yes we do. That will be a nice last paycheck before pension and social security.
I did hear however that the 520 came during covid and it might go back to 440 but we can cash some out every year rather than losing it which seems fair.
Me too
As letter carrier at the post office you can carry over 440 hours every year of annual leave. In the beginning of the year, we get our five weeks and one day 208 hrs advanced in our 3rd check. so it would make more sense to just use up your leave the year before down to your max and hang around for three more pay periods and leave when you get that advance with 608 hrs.
Your advanced annual leave can only be used *provided* you're going to work the entire year.
Be careful there.
It's simple. Try to save as much of your annual as you can in the last few years.
Use sick leave where you can and save that annual.
When you retire, you get a lump sum of the balance of annual, and you get it before your OPM status kicks in.
Great video!
Glad you enjoyed it
In my opinion it’s better to use your leave. I retired 12/30/23 with 420+ hours of A/L only to have half of eatin up by taxes. Hopefully I’ll get a decent amount back with my 24 filing, however it was very disappointing to have saved & saved A/L only to have half be withheld or paid into taxes. Therefore I would have been better off to have used a large sum of my leave in my opinion.
Thank you for this insight. I had a friend that retired and said the same thing. The check was not as big as he thought it would be because of taxes.
Hey buddy.... I'm trying to plan myself and have pretty close to what you have when I do retire 12/31/2026. Without going into your personal finances....can you provide an example on the "Amount of Taxes" that was taken out?
@@jt2quick I retired the end of 2023. It was the usual percentage taken out of each pay period while working. It was normal payroll taxed, around 40% for me.
@@jt2quick a little more than 40% of my 420+ hours lump sum. In the end it seems as though a person would be better off to use leave over the last year or so instead of having such a large chuck taken out. I had 10+ months of sick leave, so I had to widdle that down to a little over 10 months to not lose sick. I always heard your lump sum payment would bridge the gap before the first monthly payment starts. I actually started getting my interim payments prior to my lump sum payment. In the end I only received two interim payments prior to OPM finalizing my retirement. So not much of a wait at all for me.
@@morganjen1962 Thanks for that info, Morgan....give me food for thought and some planning.
Great video and thank you for sharing. This is extremely common for those in the military about to retire. It is called "terminal leave". Terminal leave isn't a technical term, but it's the same concept of using all of your saved leave at the end of your career or of your term of service. In the military though, all affairs will be taken care of before the "terminal leave" starts so there wouldn't be a requirement to come back to the office to check in. Sure, each case may vary, but it's so commonplace in the Army (I can't speak for the other services) that it's nearly a sure thing if one wants it. And yes, it comes with those same perks as you mention it. It is the better play financially than to sell back any leave.
In some cases, taking extended annual leave would cause problems. We had projects due all the time, so there's no way I could have done that. Very commonplace in the military, though.
@@morganjen1962 I think the point would be that the leave is terminal, meaning that all parties understand and agree that the federal career is ending. The individual going on leave wouldn't be involved in any projects anymore since they are retiring. The office workload isn't a factor. No one can say, "oh, I can't retire yet because we're too busy or I have such and such project due". I think the premise is that a "terminal leave" option should be able to apply in federal positions just as much as in military.
240 hours is what I want to hold on to
But…with an end of year retirement, you won’t get the new pay rate/raise for January.
I thing the GS field does , look into it, , WG do not so we just go when ever , get debt free and live like no one else
Title 5 CFR - Administrative personnel - Chapter 1 OPM - subchapter B - CSR. PART 550 Pay Administration (General) - para 550.1204
Take your sick leave liberally as you get close to retirement.
I’m retiring at 62 years + whatever gets me to the end of the PPE date.
Never thought about taking my annual leave at the end. Interesting. Will have to think about that. I will have 250 hours when I plan to retire. Take leave in place + new leave earned or lump sum it. Good idea.
I prefer to save sick leave for the pension bonus - more added value than taking fake sick days.
@winterversion It really doesn't help that much but you do you
@@salsaverde3521it comes out to be a little over a 5% bump in my pension. Not life changing, sure, but I prefer it over "liberal sick leave" before retirement.
Thank you, very informative video! Quick question, so if there is a situation where we accumulate use or lose leave a year out before retirement, if we start off with 240 and accumulate use or lose throughout the year. Is there a possibility of get 240 plus whatever you accumulate during the year before retirement? Like now I have 240 that I didn’t take last year and have 108 hours that I need to take or I would lose it. So would it be where we get 348 hours of pay?
Yes, as long as you don't spill over to a pay period in the next leave year and lose the 240...
It might be a good tidbit to add scenario if person retires at end of the year and moves from state with taxes to state without tax.
Thanks for the informative video once again. Now that I see other comments about it, having 2nd thoughts on selling or using my potential accumulated leave. Been carrying over 240hrs every year now over 3 years and have till 12/31/2026 when I ETS....now..wondering which would more....financial sense based on other people's experiences... keep them videos coming.
What's ets?
@salsaverde3521 ooh sorry about that... reverted to my military days.. ETS.. Expiration Term of Service
Retiring at the end of this year with 440hrs of annual.
Can someone tell me if the annual leave payout is taxed like an award or is it taxed like normal wages (can be exempt with a change on the W4)
Great video. What if I had leave restored from the previous year and I also carry over 240 hours of leave and earned an additional 240 throughout that year. be then paid out the three aforementioned totals when I retire at the end of that year?
You'll definitely get benefits for that.
Once you leave the uniformed services, you’ll no longer be able to make retirement contributions. So isn’t it better to use up most of the annual leave so to get the TSP match, extend time of service for social security and FERS?
I dont belive , that true , If you have a elegable retirement account , from a new job you can put money in, look into it. If you are going strait to a new job for example.You can roll over money from eligible retirement plans, such as a 401(k), 403(b), or traditional IRA, to your existing TSP account. There are multiple advantages to rollover contributions to the TSP, and you can use this option even after you retire. ,,just dont touch it !!!
31 December retirement question. Will the payout be computed using the January pay rate or the December (preannual raise) rate?
Here's a great video about that:
th-cam.com/video/6i4rFDr1wOs/w-d-xo.html&ab_channel=HawsFederalAdvisors
How does this work if one has "use or lose" leave? Will that amount of "use or lose" be paid out? For example, if one has 240 hours of annual leave accrued plus 63 hours of "use or lose" and retires before the "lose" date. Will 303 hours of leave be paid?
Great question. Here is a great article about that:
www.opm.gov/policy-data-oversight/pay-leave/leave-administration/fact-sheets/leave-year-beginning-and-ending-dates/
Going out on “Terminal Leave” isn’t allowed for Federal Employees.
@eandrgoodwin
Right, it's not called terminal leave for civil since you have to come back on last day... but the concept is the same, assuming your boss oks it, you're on leave at the end.
@@sfjarhead4062yeah, I looked into that. Apparently your boss could get into trouble for approving that!
One reason I read for not allowing Terminal Leave is that a Civil Service employee can withdraw their retirement application all the way up to their departure date, so your employer can’t hire your replacement until they’re sure you’re gone! So letting someone use up all of their leave before they retire delays that hiring process.
To manimize your use/lose leave isn't it correct to retire at the end of the pay year? This year being January 11th, 2025???
Your use-or-lose AL will expire on 31 December of the calendar year.
@@morganjen1962 That is incorrect the end of the leave year is no necessarily December 31 and rarely is. For the next several years, it is some time in early January.
You are correct, the end of the leave year coming up is Jan 11. It varies year-to-year. He has other videos about the value of leaving at the end of the month so that your pension is effective the first day of the following month, so you just have to do calculate what works best for you.
I plan on leaving “pun intended “ at the end of the year with 480 hours
Max is 448 unless you are in the post office had to leave in March because I was using to much. 😊
@@scottgold1054where are you getting 448 from?
If you don't have any money saved or at least one year of savings .. then you are not ready to retire... because when you are retire.. you will get a greatly reduce amount to live off. It best to use your Annual Leave and take off and get your full salary amount and save that money !! When you retire you shouldn't have any leave left.
What do us millennials do when social security run out in 10 years?
Here's a great video about that:
th-cam.com/video/OOk8FIHTs3Q/w-d-xo.html&ab_channel=HawsFederalAdvisors