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Estimating Tier 2 Benefits
(Posted October 31, 2002)
Question 199: I'll have 36 years of Social Security coverage and 6 years under Railroad Retirement when I reach age 62. With an average of $42,000 a year, how much will my Tier 2 benefit be?
Answer: My first question to you is, when did you earn your 6 years of Railroad Retirement credits? Recent legislation lowered the vesting requirement from 10 years to 5 years, but only if the rail worker has aleast 60 calander months of credits after 1995. So you're eligible for Railraod Retirement only if you meet that requirement. If you are, the formula for Tier 2 is straightforward: 0.8% times years of service times your average monthly earnings for the last 60 months of railroad service.
The amount of your Tier 2 would be reduced at age 62; the exact amount of reduction depends on the year you were born.
If you are vested, you should contact the Railroad Retirement Board for the most accurate estimate.
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