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Stop, Look & Listen: Railroad Retirement Benefits Q&A

Answers are provided by Robert S. Kaufman

Tier 2 Benefit Formula

(Posted August 4, 2004)

Question 497: What is the formula the Railroad Retirement Board uses to determine a person's Tier 2 benefit?

Answer: Here's how Tier 2 benefit is computed:

Step 1. Determine the 60 highest months of railroad earnings.

Step 2. Determine the "Average Monthly Compensation" (AMC) by dividing the total earnings for the 60 highest months by 60. The result is the AMC.

Step 3. Determine the Tier 2 factor. Multiply the AMC by the total years and months of railroad service. Do not round or drop fractional years.

Step 4. Multiply the Tier 2 factor(Step 3) by 0.7%. The result is the Tier 2 benefit.

Important notice:

Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice 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 or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.

Copyright 1997-2017 Robert S. Kaufman
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