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BenefitsLink > Q&A Columns >

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

Answers are provided by Robert S. Kaufman

Do Rail Workers Own Their Railroad Retirement Accounts?

(Posted July 3, 2011)

Question 825: What happens to the "balance" in your Railroad Retirement account after the death of the rail worker? Can the worker ever expect to actually get all of the money that is stated on the yearly form? It looks impressive at $800,000 dollars!

Answer: Railroad Retirement is not like a 401(k) plan where each worker has a separate account. It is a government retirement system where payroll taxes and income from investment of those funds are used to pay benefits to current retirees and their eligible family members. Each worker does not have a separate account nor title to the funds he or she has contributed.

If a worker dies before he or she receives benefits at least equal to his or her personal contributions, the "balance" is not paid to survivors.

The $800,000 figure appears to be your total earnings under Railroad Retirement, not your personal contributions to the system. At the current payroll tax rate, your personal contributions to date are about $50,000.

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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