Do I Need a Current Connection to Receive Railroad Retirement Benefits?

Transcript:

How important is my current connection to get my railroad retirement? Welcome everyone to another edition of the Highball Advisors Railroad Retirement Whiteboard. My name's John McNamara of Highball of Advisors, and today we're going to talk about the current connection. All right. I got a lot of calls and emails and texts, all that, on the current connection. "How important is it in order for me to collect railroad retirement?" I mean, there's some people out there, railroaders say, "Hey, if I leave the railroad, am I even going to get railroad retirement?"

So I thought I'd go over exactly the current connection again. So current connection is 12 months of credible railroad service in the last 30 months. That means you're connected to the railroad. So I guess the best way it connects you really to the RRB, if you really think about Railroad Retirement Board, or I like to keep it really simple, no W-2 work after the railroad and before your railroad retirement annuity starts.

So that's like, "Hey, maybe I left the railroad and I've got five years before my railroad retirement annuity starts. So what am I going to be due during those five years? So if I go get a W-2 position, I'm going to lose my connection. But let's say I've saved up enough money and I've built a bridge to retirement. I could do that, or I'm self-employed, I set up a single member LLC, I can keep my connection that way." So connection, think of it as still connected to the Railroad Retirement Board. They're the ones that are going to help you out with your retirement. So that's something about that.

So if you have your current connection during your service, two things that are outside of a really railroad retirement is, you can get the occupational disability and the supplemental annuity. All right. Those two things. But what I want to talk about, really, the important part that I help most of my railroad clients with is that survivor annuity. That's really the important part of railroad retirement for railroaders. So survivor annuity is basically something that happens to the railroader, and the spouse; he or she will get that railroader's tier one and tier two.

So the survivor annuity, when you go and apply for that survivor annuity, they're going to see, do you have that current connection. All right? So that's the important part. Then that connection will determine which agency pays the survivor benefits. So if you start collecting your railroad retirement, because you always get that tier one, tier two, but if you're collecting that without the connection and then something happens to you, that spousal annuity will go away and it kicks into survivor annuity.

At that point, they're going to say, "Okay, you're not connected. So your spouse will go into Social Security to collect the tier one portion of the survivor annuity." All right. That will all go through the Social Security Association. Now, if you're connected and the survivor annuity kicks in, all right, you're going to get the tier one portion of the deceased railroader and the tier two portion of the deceased railroader. That is basically what the survivor annuity is. But you can only get that through the current connection. Very, very important, that current connection, I can't stress enough about it.

So really, think about when you do leave the railroad, "How am I going to protect that connection?" Now, I'm assuming if it's five years in the railroad or something like that, then, okay, maybe that's not as important. But if you have a lot of years left, I mean, you've compiled a lot of years, 25, 30 years, and then you're going to retire without your connection. No, think about that. Think about that current connection.

So I just wanted to drill home again, the importance of the current connection. I hope you found this video helpful. Feel free to reach out to me, if you're at or near retirement and you're wondering about your current connection, you'll go through that boarding-for-railroad retirement process. You'll find that very helpful. Also, please click on the like on this video. Please share it with other railroaders. Really, really important stuff, that current connection. All right. So until next time, everyone, please stay safe, stay on track, and take care. So long everybody. Bye.

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