Question 91: I want to retire from the railroad at 55. I'll have 29 years of credits. When can I start getting Railroad Retirement? If I go to work for a nonrailroad company between ages 55 and 62, will my benefits be reduced? What about my "current connection"?
Answer: You have asked some excellent questions, which illustrate both the complexities of the Railraod Retirement System and the advance planning required so that benefits are not inadvertenly lost.
First, if you leave rail work before getting 30 years, you will suffer a hugh penalty. You won't qualify until age 62, and your benefits will be reduced by more than 20%. If you have at least 30 years before leaving, you can draw benefits as early as 60 on a reduced basis or at 62 without any reduction.
Having a "current connection" provides an important series of benefits and protections. Without one, Social Security-- not Railroad Retirement-- will pay your survivors after your death. Because Social Security does not have a Tier 2, your Tier 2 benefits would be lost. Further, Railroad Retirement generally pays higher benefits, and at earlier ages, than does Social Security.
Without a current connection, you also would not be eligible for a Supplemental Employee annuity, which generally adds $23 to $43 a month to your retirement benefits. Also, you would lose the protection of being able to receive an Occupational Disability Annuity should you become sick or injured between ages 55 and 62. You would have to meet the stricter "total disability standards" of Railroad Retirement and Social Security.
A current connection always exists when a worker retires or dies directly from rail work. It get more tricky when a worker leaves the rail industry before retiring (or dying). In that event, the worker usually is protected for about 2 years after leaving. After that, the worker can lose his current connection by working in nonrailroad work for three straight calendar quarters and having significant earnings.
There are exceptions for self-employment, elected public office, and for employees with 25 or more years of rail work who "involuntary" leave the rail industry.