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Answers are provided by Robert S. Kaufman
Consequences of Leaving the Railroad Industry Before Retirement
(Posted February 6, 2002)
Question 157: At 56, I accepted early retirement and a company pension. I had exactly 29 years and 8 months of railroad service when I left. What impact will this have on my or my wife's Railroad Retirement benefits when we reach "normal" retirement age? What would be the consequences if I started to work in a nonrailroad job before I'm eligible for Railroad Retirement?
Answer: Too bad you couldn't have waited four more months and left with 30 years of Railroad service. Because you are just short of 30 years, both you and your wife will have to wait to retire at 62 instead of 60.
If you work beyond the 18th month after the month you left the railroad, and are earning at least $1,000 a year, you will lose your "current connection" status. Without a "current connection", you would not be eligible for an "Occupational Disability Annuity" if you became disabled before 65. You also would not be eligible for a "Supplemental Employee Annuity" but you may not receive one anyway because of the company pension.
Most important in retaining a "current connection" is the payment of survivor benefits to your wife. The RRB will pay her both a Tier 1 and a Tier 2 benefit. And the Tier 2 benefit is worth even more since the recent amendments increase it from 50% to 100% of your Tier 2 benefit. Without a "current connection", Social Security will pay your wife a widow's benefit that would only be equivalent to a Tier 1 benefit under Railroad Retirement.
Please see Q&A 154 of this column for more information on how to protect a "current connection".
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
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