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

Answers are provided by Robert S. Kaufman

When Can a Worker Take Early Retirement?

(Posted March 1, 2001)

Question 87: What is the earliest age that a rail worker can retire under Railroad Retirement? What are the good and bad points of early retirement as opposed to waiting until later to receive benefits?

Answer: A rail worker with 30 or more years of service (360 months) can retire at age 60. The annuity is reduced between ages 60 and 62, but that reduction may be eliminated if H.R. 180 is enacted into law. (H.R. 180 is a bill that's been introduced in Congress.)

For a rail worker who has fewer than 30 years of service, the earliest retirement age is 62. Such a worker's annuity is reduced between age 62 and his or her "normal retirement age." For workers born before 1938, normal retirement age is 65. For workers born in 1938 or later, normal retirement age increases from 65 gradually until it reaches 67, depending upon the particular year of birth.

Of course, a worker who is disabled can retire before 60 if he or she meets the requirement for a regular or occupational disability annuity.

There have been numerous studies done on the benefits and disadvantages of retirement at certain ages. It's more than just a financial decision, although the ability to support yourself is the key to having a secure retirement. Some people are ready in their late 50s, while others work full time into their 70s. In fact, Social Security was changed last year to permit people 65 and over to draw full benefits even if they continue to work.

The latest Railroad Retirement Board figures indicate that later retirees live a little longer on the average. A male retiring at 60 can expect to live to 79.8 years. But a male retiring at 65 can expect to live to 80.8 years. Similarly, a woman retiring at 60 can expect to live to 83.9 years while a woman retiring at 65 can expect to live to 84.6 years. Overall health could be a factor in the difference; perhaps people with health problems tend to retire at an earlier age.

People who wait until normal retirement age will get higher benefit payments each month as compared to the payments that will be received by a worker who chooses early retirement, but by retiring early (say, at age 62) will receive reduced benefits for several years before a person who retires at normal retirement age (say, age 65) receives the first dollar.

My personal preference is that, if you are otherwise ready, retire at the earliest age possible. No one can foresee the future and you cannot buy back years of good health, no matter how much larger your benefits will be in 3 or 5 years.

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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