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

Answers are provided by Robert S. Kaufman

When a Nonvested Rail Worker Returns to Rail Work and Becomes Vested

(Posted December 4, 2000)

Question 77: I worked for railroads for about 7 years during the 1970s. Reading Q&A-2, it appears to be advantagous for me to return to rail work so that I can become vested. But I have a few questions:

Have the credits I've already earned under Railroad Retirement already been transferred to the Social Security system?

Are the credits under the two programs different?

How are the credits under Railroad Retirement figured? Earnings? Time worked?

Because the credits for nonvested rail workers are transferred to Social Security, are they increased because higher payroll taxes have been paid on them?

Answer: Credits for nonvested rail workers are not sent to Social Security until you either file for Social Security benefits or until your death.

Yes, the credits under the two programs are figured differently.

Using yearly earnings, Social Security credits "Quarters of Coverage" based on the amount of earnings for that year. In 2001, each $830 yields one Quarter of Coverage, with $3320 or more generating four quarters. No more than 4 quarters can be credited for any year. Generally, a worker need atleast 40 quarters (10 years) to be vested for Social Security. Railroad Retirement credits "Service Months" based on the work record and earnings for that year. No more than 12 months can be credited in any year. A worker just needs to work on hour in a calendar month to be credited with a Service Month. 120 Service Months (10 years) are required for vesting.

Railroad credits sent to Social Security are not increased to reflect the higher payroll taxes on rail work.

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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