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Age Reduction Is Forever
(Posted May 24, 2003)
Question 257: My late father had 38 years of railroad service. He retire in 1999 & died last month (April 2003). My mother is 60 but has not yet retired. She has talked to the RRB about accepting her widow's benefit now with a reduction because her normal retirement age is 65 & 8 months.
Is an age reduction permanent or just until she reaches her normal retirement age?
Answer: An age reduction is permanent with one exception. At her normal retirement age, 65 & 8 months, the reduction is adjusted to eliminate any month she did not receive benefits because of excess earnings. In 2003, the earnings limit for people receiving a reduced benefit is $11,520. If her earnings are more than the ceiling, her benefits are reduced $1 for each $2 she earns after $11,520.
People who accept a reduced benefit usually do so to receive benefits earlier than if they waited until they could get full benefits. No one can forcast the future & people who are already retired or have lower earnings generally find it to their advantage to take a reduction for early retirement. In your mother's case, she could receive a widow's benefit for more than five years before she would reach her normal retirement age. But if she has significant earnings & she wants to continue to work, it probably would be smarter for her to hold off filing for a widow's benefit.
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