According to OPM:
“It is recommendable to retire at the end of any month or for CSRS, retire within the first days of the month, as your retirement will commence
Why end month?
It is best due to the provision that states that your annuity commences at the start of every month after retirement.
Example:
If you retire on April 30, your pension will commence on May 1. This means that there will be no gap between the date when you earn your salary and when you earn annuity.
If you choose to retire on April 6, for example, it means that you will not earn any salary or annuity for that month from 7 to 30 April because you will no longer be termed as an employee. You will start earning annuity on May 1 and nobody like that kind of gap.
This is different from CSRS’s standard rule.
If you are in CSRS and you retire on the last day of the month or the first three days of any month, your annuity will commence on the retirement day. Those three days may seem insignificant, but they help you earn full pay, and you get to earn additional annuity.
