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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
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