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No Practical Way To Avoid Reduction In Spouse Benefits
(Posted May 20, 2004)
Question 452: I work for the railroad. My wife soon will rejoin the workforce. Are there any retirement plans that would not be deducted from her spouse Railroad Retirement benefits when she qualifies?
Answer: Most employment in the United States is now covered by Social Security. Even the President, Congress and federal government workers pay into the Social Security funds. Major exceptions include state and local governments and school teachers in about half of the states.
But there is a reduction in both Railroad Retirement & Social Security spouse and survivor benefits if the spouse also receives a public pension. Tier 1 would be reduced by 2/3 of the public pension benefit. So even if she doesn't work in employment covered by Social Security, her spouse benefits probably will be reduced.
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