15 Nov How does Social Security work with Railroad Retirement benefits?

Q. In March 2023, I will have 20 years working on the railroad. I will be 65. Does Social Security put in the money I paid into Social Security for 24 years in my Railroad Retirement benefit? How does it work?
— Retiring soon

A. Congratulations on your pending retirement.

There are a few items to consider here.

First, it’s possible that you are eligible for dual benefits if you worked for the railroad and held a non-railroad job, said Jeanne Kane, a certified financial planner with JFL Total Wealth Management in Boonton.

For Social Security retirement benefits, eligibility is generally based on work history, she said. You would need 40 quarters or 10 years to qualify for benefits, which you can start to take at age 62.

“You would qualify because you worked and paid into Social Security for 24 years and you’re over 62,” Kane said.

She said Railroad Retirement benefits are also based on your work history.

You need to have more than 10 years, or 120 service months, of railroad industry work or at least five years of railroad work after 1995,” she said.

If you don’t qualify based on this, your railroad industry earnings would count towards your Social Security credits, she said, and if you do qualify, then those earnings don’t count towards Social Security eligible earnings.

Government doesn’t want you to double dip, she said. But dual benefits don’t equal double benefits.

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

Kane said there are two tiers in the benefit calculation

Tier 1 uses total Railroad and Social Security earnings credits, she said, and it gives an estimate of what Social Security would pay if your earnings at the railroad were covered by Social Security.

Tier 2 is only based on your railroad earnings, she said, and it is not reduced because you are eligible for Social Security.

“This follows the same type of regulation where someone who is eligible to receive two Social Security benefits can only claim the higher of the two,” she said. “They can’t get both.”

For example, if you are married and are eligible for half your spouse’s benefit or your own benefit on your own earnings, you can get the higher of the two, not both.

Benefits coordination can get complicated, so you should speak to both the Railroad Retirement Board and Social Security to better understand what your benefits will be.

You can call the Railroad Retirement Board at (877) 772-5772 or visit a field office.

And to contact Social Security, you can go online ssa.gov and schedule an appointment to get more specific information on your benefits.

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This story was originally published on Nov. 15, 2022.

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