As part of your retirement plan, you need to seriously consider the best time of year to retire. Not only are there financial implications to think about but you should also consider the season at the time of your retirement. Be sure to check the programs at your company before tendering your resignation.

A. Cost of Living. Some employer benefit programs state you must be retired on or before July 1st (meaning your last working day would be June 30) to receive any cost-of-living increase on your pension granted for July 1st. This means your on-going pension will actually be less if you retired in July or August compared with retiring on or before July 1st.

B. Vacation Payoff. The first week of January may be appealing to begin your retirement especially if you are carrying more than the maximum accrual for vacation. You could get paid for the total as long as you retire before the end of the first pay period in January. Retiring in January also gives you the entire year to absorb that lump-sum payoff.

C. Tax Considerations. Tax considerations and the best time to retire are different for each individual. It’s worthwhile to estimate your taxes based on different dates throughout the year and I strongly recommend getting advice from a tax advisor a year or two before you plan to retire.

D. Season. Regardless of when you choose to retire, it is important to plan activities or events to counter or coincide with the season. For example, if you retire in January, you may want to start with a trip to the sunny south or take a ski holiday. However, if you choose to retire in the winter months (January – March), you may face many grey, cold, snowy days that can give the inaugural weeks of your retirement a bleak feeling.

Retiring in the spring (April – June) and the prospect of gardening and being outdoors may be appealing. Or perhaps, you prefer the summer (July – September) and spending additional time at the cottage to officially launch your new life. The fall months (October – December) may be ideal as this is a time of completion, celebration, and planning for the New Year.

When planning your retirement, decide the time of year that best suits you and your spouse/partner from a financial, seasonal, and goal perspective.