Hello and welcome to another episode of the Highball Advisors Railroad Retirement whiteboard series. I'm John McNamara from Highball Advisors, and today, we're addressing the questions of railroaders who are either on the verge of retirement or have a mix of Social Security and railroad service years, wondering whom they should contact for guidance. Let's simplify this process and break it down step by step.
The key point to remember, and if there's one thing to take away from this video, it's this: If you have accrued at least five years of credible service, you are vested. In such cases, always make your first point of contact the Railroad Retirement Board. Whether you have inquiries related to railroad retirement, Social Security, Medicare, or any other related matters, everything flows through the Railroad Retirement Board. This is absolutely crucial because contacting Social Security directly, especially when you're already collecting benefits from them, can lead to issues of double benefits, and although they may not catch it immediately, rest assured they will eventually. This can result in having to repay the excess money along with interest and penalties, which is far from ideal. So, remember, everything goes through the Railroad Retirement Board after five years of credible service, or if you're entitled to any survivor annuity or spousal benefits due to your spouse's railroad service.
Now, let me illustrate how the interaction between Social Security and the Railroad Retirement Board operates. Consider a railroader who qualifies for the Railroad Retirement Annuity Tier One, but it's comprised of both Social Security and railroad retirement years. Their top 35 earning years include 20 years of railroad service and 15 years of Social Security. In this scenario, they should reach out to the Railroad Retirement Board, given their five years of vested service. Once in contact, the Railroad Retirement Board will calculate their Tier One, taking into account the railroad portion and then collaborate with Social Security to determine the Social Security benefit component. The Tier One payment will then be reduced by the amount of any Social Security benefit received. This eliminates the possibility of double dipping, ensuring that you receive the highest possible amount.
By following this approach and consistently reaching out to the Railroad Retirement Board for resolutions and guidance, you can save yourself a great deal of trouble down the road. If you find yourself at or near Railroad retirement and want to navigate the boarding process, feel free to reach out to me. I welcome your questions and inquiries on this topic. Additionally, please click the notification bell to stay updated with our latest videos, subscribe to our channel, and consider sharing it, especially with those nearing retirement. This valuable information can help them avoid potential pitfalls. Until next time, remember to stay safe, stay on track, and take care. Farewell, everyone!
Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved from Highball Advisors, and all rights are reserved.