Many factors influence the precise timing of your retirement date. One to consider is how your retirement date affects your Washington State retirement benefits. The Washington State Department of Retirement Systems (DRS) tracks two dates:

1. Your separation date: The last day you worked for your employer.
2. Your retirement date: The date you formally begin claiming your retirement benefits.

These two dates cannot fall in the same month. If your last day of work is June 15, the earliest you can begin claiming your state retirement benefits is July 1. The DRS pays benefits at the end of each month, so in this case, you wouldn’t receive your first payment until the last day of July, 45 days after your last day of work.

The best way to minimize the time you go without income is to retire on the last day of the month and start claiming your state retirement benefits on the first day of the following month.

Another consideration when timing your retirement date is maximizing the benefit of annual Cost of Living (COLA) increases. The state makes a cost-of-living adjustment every July. You are not eligible for a COLA increase until you have been retired for one full year. Many people time their retirement to maximize the impact of annual COLA increases: they start claiming their retirement benefits on July 1, so they receive the benefit of the next increase, which is applied the following year. Retiring in August, for example, would mean waiting 23 months before receiving the benefits of the next COLA increase.

The DRS strongly recommends that you notify them at least three months before your planned retirement date (and preferably six months) so they have time to review your available benefits, address any discrepancies, and set up your monthly payments in their system.