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Stop, Look & Listen: Railroad Retirement Benefits Q&A

Answers are provided by Robert S. Kaufman

Tier 1 and Tier 2 Benefits Explained

(Posted August 2, 2013)

Question 1036: Please explain Tier 1 and Tier 2 for a railroad worker and a spouse who stay married.

Answer: Most Railroad Retirement Annuities consist of two separate components: Tier 1 and Tier 2.

Tier 1 is based on the rail worker's lifetime earnings while in rail service and, if any, earnings while in service covered by the Social Security program. A reduction applies when calculating the Tier 1 benefit, if the worker also receives a benefit from Social Security.

Tier 2 is based only on the rail worker's rail service. It is similar to a private employer's pension. It is not reduced by any Social Security benefit the worker receives.

Important notice:

Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.

The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.

Copyright 1997-2017 Robert S. Kaufman
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