A Good Time to Take Social Security Before Railroad Retirement

Transcript:

Should I ever take social security before railroad retirement?

Welcome everyone to another edition of the Highball Advisors Railroad Retirement Whiteboard. My name's John McNamara of Highball Advisors. And today we're going to talk about a topic that really, I get a lot of things going back and forth on social security, railroad retirement. So I thought I'd shoot a video on when's a good time to take social security. So here's what this strategy is for. This is for working railroaders who are still working, because if you're working, you can't collect railroad retirement. So that's straightforward there. All right. And they spend most of their working years in the social security, non railroad position. And then obviously they'll have less than 30 years of service because, like I said, they spent most of their years working in social security. So this is what that strategy is for.

So what you have to understand is we're talking about the social security aspect of it. So if you look at the work reductions in social security, you can collect social security as early as 62 and, in this case, anybody born after 1960, your full retirement age is 67. So between 62 and 67, there's going to be work reductions on your social security. However, between 62 and 66, it's $1 for every $2 you earn anything over, for 2022 when this is being recorded, 19,560 and that number changes every year. However, when you're 66 to 67, it goes out to $1 for every $3 earned over... Look at the new base here, 51,960.

All right. So right here is the opportunity that I'm talking about is you don't want to be paying away these deductions here, because remember if you turn on your social security and you have mostly social security years, that is going to affect your tier one, when it comes time to turn on your railroad retirement. You leave the railroad, you don't obviously have your 30 years, they're going to go back and say, "Okay, you have, let's say, 15 years of railroad service and 20 of social security to make up your highest earning years. However, you turned on your social security at 62, there's going to be a big reduction there."

So that final year might be a good way to turn it on because it's only $1 for every 3. And it doesn't kick in until over 51,960. So I just wanted to show you that. That's a good one, only if you need that little additional income. If you don't need the additional income, don't do it. But if you say, "Hey, you know what? I need a little additional income." That would be the only time that I would recommend taking social security before railroad retirement. Because obviously you can't take it, if you're still working for the railroad. And like I said, possible reductions to tier one.

I hope you found this helpful. Feel free to reach out to me if you have any questions. Subscribe to my YouTube channel, click on the notification bell to get the latest video. Until next time, everyone, please stay safe, stay on track and take care. So long everybody. Bye.

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