Railroad retirement Benefits
If you work for CSX, Union Pacific, Norfolk Southern, or Amtrak and are confused by the difference between your Tier 1 and Tier 2 benefits, you aren’t alone. What about coordinating Tier 1 benefits with social security, the supplemental annuity, or spousal benefits… How do those work? We have all of that and more covered for you in this blog series.
To learn more, choose from one of our many blog posts on railroad retirement benefits below:
The history of Railroad Benefits dates back to the 1930’s, with the National Railroad Retirement program being established by the 1937 Railroad Retirement and Carriers’ Taxing Act. Our country soon after entered WWII which was followed by the Korean War, then the Vietnam War, and so on. Many Railroaders were drafted or volunteered for service during these wars… would their Railroad Retirement be negatively impacted by that pause in their time working for the Railroad?
The idea of a Current Connection comes up in the Railroad Benefit conversation often. But what does this have to do with your benefits?
Survivorship planning can include a plan to replace future lost income, take care of existing debts and possibly provide a legacy to your heirs. For those still working, a big part of funding those goals will come from your Employee Benefits. How does this work for Railroaders? Is there anything that a Railroader beneficiary will receive that is different than the average worker?
We are coming to the end of tax season and you have your taxes already filed, right? GREAT NEWS – or hopefully soon it will be great news! You are about to retire from the Railroad industry and the thought pops up – do I know how my railroad retirement benefits will be taxed? Other than my income amount, will my next years’ tax return look different that last years? So much of what I’ve read online is SO confusing! Let’s try to simplify and first examine how your benefits are taxed.
We’ve discussed how your railroad retirement benefits, Tier I and Tier II, work in a previous blog. Your spouse has been by your side for many of those railroad years and you know they are supposed to receive some type of spousal retirement benefit. But what will they receive?
When we look back in the history of Railroad Retirement, we know that Railroad Retirement was started before Social Security even began. However, in time it became more integrated. In 1951, a financial interchange was established between the two. In 1965, a provision was created to coordinate the tax rates and allow Medicare to expand and cover those in the Railroad Retirement system. In 1974, the Railroad Retirement Act split the Railroad Retirement benefit into Tier I and Tier 2, with Tier 1 is designed to be equivalent to the benefits offered by Social Security.
Here you’ll find a monthly blog series to help you navigate the world of railroad benefits: coordination with Social Security, how spousal/ex-spousal benefits work, benefits for your dependents, taxation, and so on. Since this is the first article, we’ll start with the basics of RAILROAD RETIREMENT BENEFITS.