It is important for your finances to choose carefully the day you end your career.
The long-awaited date is fast approaching. After forty years of practice, it will soon be time to say goodbye to the world of work. The deadline is approaching, but you have not yet decided precisely on the day when you will definitively leave your job. If at first glance, the sooner seems to be the naturally preferred option, several elements must be taken into account and it is better not to rush: it will be better for your bank account.
To the point of saying that there is an almost ideal date to stop working. By combining several elements, this appears to be the most advantageous for employees who wish to retire. And in order not to miss this deadline, it is necessary to start the process now given the processing times for files.
This date is February 1st. Leaving a month after the New Year is more advantageous for your finances, rather than leaving at the end of the year or even in January. The explanation lies in two points.
First of all, the retirement pension is calculated on the 25 best years. So, if you were planning to finish in October or November, it is better to continue until the end of the year. This allows you to have an additional full year. As generally, at the end of a career, the salary is higher than at the beginning, this will lead to a mechanical increase in the calculation base of the pension, thus allowing it to be increased. A few extra euros that will always be welcome.
Better yet. While pushing until February may seem difficult, it will allow you to pay less tax. Retirees who leave on the 1ster January receive their bonus and final settlement on December 31. This is therefore taken into account in calculating taxes, which will be payable during the first year of retirement. However, given the drop in income, this will represent a significant burden.
Leaving on the 1ster February, the bonus and the balance of all accounts will be paid on the 1ster January. This will only be included in the tax return the following year, when the amount to be paid in taxes will decrease due to the transition to retirement. After four decades in the world of work, extending by a few weeks is an option to consider for your wallet.
But we must not delay in starting the process to leave on this date. With a processing time of 4 to 6 months, the constitution, today, of a retirement file would not be completed until the beginning of January at the earliest.