Social Security: Can Retired Railroad Workers Get Dual SS Benefit?

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U.S. railroad workers who are considering retirement amid continued threats of a national strike might have questions about how their railroad retirement benefits could impact their Social Security benefits.

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As GOBankingRates previously reported, a railroad strike that had been scheduled to take place before Thanksgiving has been pushed back to early December, temporarily easing fears that an already strained supply chain in the United States would run into even more problems. However, the threat of a strike remains and could happen as soon as Dec. 9, according to union officials.

Rail workers with enough years under their belts might decide to retire rather than deal with a prolonged strike. If so, they can look forward to railroad retirement benefits that are separate from Social Security retirement benefits but work similarly. In the case of railroad workers, retirement benefits are known as annuities.

Railroad employees with 30 or more years of creditable railroad service are eligible for regular annuities during the first full month they reach age 60, according to the U.S. Railroad Retirement Board. In this case, “creditable” refers to credits for a month of railroad service, which are earned for every month in which an employee had some compensated service covered by the Railroad Retirement Act.

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The amount of the annuities is based on your age and service. Rail employees with less than 30 years of creditable service are eligible for regular annuities the first full month they are age 62.

Railroad employees with less than 30 years of service are subject to early retirement reductions if they retire before attaining their full retirement age. Full retirement age for a railroad employee with less than 30 years of service is 66 for those born in 1943 through 1954. That gradually increases to age 67 for those born in 1960 or later.

Benefits under the RRA are typically higher than those under the Social Security Act, the RRB said — especially for rail employees who have 30 or more years of creditable railroad service. The higher benefits can be attributed to the additional retirement taxes paid by the employers and employees covered under the RRA.

In some cases, you might qualify for dual railroad and Social Security benefits, according to Jeanne Kane, a certified financial planner with JFL Total Wealth Management in Boonton, New Jersey.

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As she told NJ.com, railroad retirement benefits and Social Security benefits are both based on work history. In the case of railroad benefits, if your rail career came before 1995 you need to have more than 10 years, or 120 service months, of railroad industry work to qualify. After 1995, you need at least five years of railroad work.

If you don’t qualify based on that formula, then your railroad industry earnings would count towards your Social Security credits, Kane said. If you do qualify, then those earnings don’t count towards Social Security eligible earnings. Although you can’t “double dip” by earning the full amount of both benefits, you can earn dual benefits, which are different.

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“If you are eligible for dual benefits, then the Social Security Administration determines how much is based on Social Security earnings,” Kane added. “The railroad benefit is reduced by this amount and a combined benefit is paid.”

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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