Coronavirus (COVID-19) News and Resources
Coronavirus (COVID-19) Webcasts
Subscribe to Free Daily Newsletters
Post a Job

Featured Jobs

ESOP Administrator
Blue Ridge ESOP Associates logo
Blue Ridge ESOP Associates
(Charlottesville VA / Telecommute)
401(k) Associate
Blue Ridge ESOP Associates logo
Blue Ridge ESOP Associates
(Charlottesville VA / Telecommute)
Retirement Plan Consultant
Cetera Retirement Plan Specialists logo
Cetera Retirement Plan Specialists
(Telecommute)
Retirement Plan Administrator
Steidle Pension Solutions, LLC logo
Steidle Pension Solutions, LLC
(Lebanon NJ)
Retirement Plan Administrator
SPS logo
SPS
(Telecommute)

Free Daily News and Jobs

“BenefitsLink continues to be the most valuable resource we have at the firm.”

-- An attorney subscriber

Get the BenefitsLink app LinkedIn
Twitter
Facebook

BenefitsLink > Q&A Columns >

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

Answers are provided by Robert S. Kaufman

Railroad Credits Used For Both Tier 1 & Tier 2

(Posted October 10, 2001)

Question 139: I'm planning to retire in a couple of months. I received an estimate showing that three quarters of my Railroad Retirement benefit will come from Tier 1,with only one quarter from Tier 2. I have 31 years of railroad work and only 7 years under Social Security. Shouldn't most of my retirement come from Railroad Retirement (Tier 2), not from Social Security (Tier 1)?

Answer: Most of your retirement benefits will come from your railroad work. Your Tier 1 is based on your combined Railroad Retirement and Social Security earnings; your Tier 2 is based only on your railroad credits.

You may be confused because the Tier 1 is calculated like a Social Security benefit but it is based on your earnings under both programs.

By the way, the ratio of Tier 1 to Tier 2 (3:1) sounds very typical. Most of the Railroad Retirement benefit is normally derived from Tier 1.


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
Related links:

(restricted access)

(restricted access)

© 2020 BenefitsLink.com, Inc.