Question 717: I will have more than 30 years of service in May 2014 when I'm 62, if I keep working until then. But instead I plan to retire at 55, when I will have 28 years of service. Does it matter for purposes of Railroad Retirement (other than percentage reductions due to early retirement) whether I have 28 or more than 30 years?
Answer: There are some serious adverse effects if you retire before earning at least 30 years of service.
Your Railroad Retirement Supplemental Annuity will be less because it's strictly based on the number of years of service. With 30 years of service, you would receive $43 a month; with 28 years you would receive only $35 a month ($8 less).
If you retire at age 55 when you have 28 years of service, and at age 62 you begin receiving your Railroad Retirement benefit, your benefit would be only 75% of what you would have received if were to have 30 years of service when your benefit begins. For example, if your full rate at age 62 would be $3,000 a month, the reduced rate would be $2,250. If you live until 82, you will have lost $180,000 in benefits.
Also be retiring at 55, you Tier 1 calculation would be lower because you would have no earnings in at least five years.