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Opportunity to Get 30 Years of Service
(Posted April 23, 2004)
Question 434: My husband is 61 with 29 years and 1 month of railroad service. He has been presented a buyout. Would it be beneficial for him to purchase 11 months service credits giving him a total of 30 years of service? He also has paid 10-11 years of Social Security. When he reaches 62, he can apply for a reduced SS benefit; however will the SS benefit have any effect on his Railroad Retirement benefit? I have TRS (Teachers Retirement System) of Texas benefits (plus 20 yrs of paid in Social Security) and I can retire now at age 58 and receive my TRS benefit.
Answer: It would be very benefical for your husband to buy 11 months of service so he would have 30 years for railroad retirement purposes. You both would qualify for unreduced benefits at 60. Otherwise, your earliest eligiblity would be at 62 and your benefits would be reduced for age as much as 30 percent.
If your husband files for a reduced Social Security benefit at 62, his Railroad Retirement Tier 1 would be reduced by the amount of his Social Security. His total combined benefit probably would be the same as his full Railroad Retirement benefit was.
Assuming your husband buys 11 months of service, you can qualify for a Spouse benefit at 60. But your Tier 1 probably will be subject to the "Public Pension Offset" and reduced by 2/3 of your TRS benefit.
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