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Answers are provided by Robert S. Kaufman
Working After Early Retirement
(Posted May 3, 2004)
Question 445: How much of a penalty would I incur by beginning to draw my retirement before I actually quit working? I am 64.
Answer: First, you cannot receive any of your Railroad Retirement benefit until you stop working for a railroad.
By filing for benefits before you reach your "normal retirement age" (probably 65 & 6 months in your case), your benefits would be reduced by 22.5 percent at age 64.
If you continue to work for the same nonrailroad employer after you retire, you will begin to lose Tier 1 benefits once your annual earnings exceed $11,640 in 2004. The loss is then $1 in benefits for each $2 earned above $11,640. Tier 1 benefits are not subject to work deduction after you reach your normal retirement age.
You also will be subject to a special Tier 2 deduction; you can lose up to one half of your Tier 2 depending on the amount of earnings. Tier 2 deductions do not have an exempt amount. They will contiue after you reach your normal retirement age.
If you go to work for a new company, you will only lose Tier 1 if your earnings exceed the annual limit.
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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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