If the Railroad Retirement board calls me, here are my five suggestions to change Railroad retirement.
Welcome everyone to another edition of the Highball Advisors Railroad Retirement Whiteboard. My name's John McNamara, of Highball Advisors. And today I thought I kind of do a fun type of topic. You know, I'm around Railroad retirement a lot. I hear a lot of different stories. So I'm very well versed in Railroad retirement. So I said, what would I do to change Railroad retirement? And I said, well, it's August, let's do something fun. So this is it. This is what I came up with. I guess this is fun. I don't know. But anyway, these were my ideas. So what I'd like to do is I'll go through my five and then you guys can put your suggestions in maybe in the comments or description box and we'll see what happens here. So my number one is I would get rid of the current connection requirements after 20 years of service.
All right. So to me, you've done 20 years, do we really need the current connection? I don't get it. All right. So I could see five, 10 years current connection. All right, fine. But you know, 20 years, it's a big part. It's a big current connection, big part of estate planning. Let's leave the current. Yeah. Let's keep that requirement there. So that's my first number one. All right, number two is, I've removed this marriage penalty from married Railroaders. I don't get it. Right? So two Railroaders are married and they can't collect the spouse annuity. Right? So to me, you get the annuity and there's a spouse annuity, but in this case, they get only one annuity and one spouse annuity. That doesn't seem right to me. So they should each be getting their annuity and they should each be getting each other's spouse annuity.
That just seems right to me. So I would remove the marriage penalty. All right. So now feel free if anybody want to kick in reasons why I'm wrong. I love learning. So just tell me I'm wrong. Here's the other one is I would extend Railroad Medicare to if you're a 60 and 30 Railroader, right? So if you hit 60, right, you should be able to get into Medicare, I think. Okay. Because otherwise you got that five years of funding. This is part of the deal of working for the Railroad for 30 years. I think Railroad Medicare should kick in at 60. All right. No different from social security kicking in at 60 of versus 67 full retirement age. I think Medicare should kick in at 60 for Railroaders. All right. So that's number three. Throw that one in there.
All right. Number four is be able to purchase extra service months. Maybe we could limit that, maybe you could purchase up to a year or something, or maybe two years. However, what you got to do is you got to pay your tax and you got to also pay the Railroad contribution amount. Right? So let's see you're at 4.9%. And I believe the Railroad's 13.4% and then basis off maybe the maximum, right? Make it worthwhile or something. But you got to pay that tax if you want that month of service, something along that. But I feel like you could do something. You can't buy 10 years or something, but maybe a year or two or something like that, along those lines. Be able purchase service months. All right. I think that can be worked out. And then the last one I came up with because I'm big on retirement and building wealth and all that is, I feel like there should be a Railroad ROTH account.
So you can invest additional after tax money, but you can invest in the National Railroad Retirement Investment Trust. Those are the pension fund that manages your tier two, right? So you would have another additional retirement account, but it only invests with these guys and they do, they do a very good job in return. And that way, you help support the tier two system and you can grow some tax free money. So that's it. These are my five suggestions that I came up to may change Railroad Retirement a little bit. You can get a conversation going. Like I said, feel free to throw in your own suggestions within reason. We're not handing out free money here, but I don't think they're that crazy. So we'll see. But anyway, I hope you enjoyed this video. Click on the subscribe button, get the latest videos or click on the notification, get the latest videos, share this with other Railroaders. We'll get a little conversation going. And until next time, everyone, please stay safe. Stay on track, and take care. So long everybody. Bye.
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