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

Answers are provided by Robert S. Kaufman

Post-Retirement Work Restrictions

(Posted July 23, 2001)

Question 119: I've worked for a railroad for 41 years. I will be 62 in September 2002. My wife is over 65; she is a retired government employee. We've owned a business (a corporation) for 15 years. I'm the president and I get a salary. I also own 50% of two other corporations but I have not received any money from them. Will I be penalized when I retire due to my "nonrailroad employment"?

Answer: An excellent question! In addition to the same annual earnings restrictions that Social Security imposes on Tier 1, Railroad Retirement has a unique work restriction on Tier 2. A retired worker or spouse can lose one half of the Tier 2 benefit if he or she continues to work for the last nonrailroad employer after retiring under Railroad Retirement.

From what you described, only your work for the corporation jointly owned with your wife appears to be an impediment. You are drawing a salary as the president and as such you would be considered an "employee" of the corporation. Transferring the business to your wife may not solve anything because it could prevent her from drawing a full Tier 2 benefit as a spouse.

You should contact the Railroad Retirement Board and ask them for a pre-retirement ruling on your employment situation. You will have to give them detailed information first, but it will be worth it in the long run to know exactly how your work will affect your retirement benefits. You don't need an attorney at this point.

If you ever find that you want an attorney, contact the local bar association or your railroad brotherhood (if you are a member), and ask them to make a referral of lawyers experienced in handling matters before Social Security, Railraod Retirement, or the Department of Veterans Affairs.

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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