How Do I Get Paid If I am Entitled to Railroad Retirement and Social Security?Tier 1 Video Retirement Financial Planning
I am entitled to Social Security and Railroad retirement. Shouldn't I be getting two checks?
Welcome everyone to another edition of the Highball Advisors Railroad Retirement whiteboard. My name's John McNamara, Highball Advisors, and today we're going to talk about Railroad Retirement social security. So I get a lot of railroaders or that come to me and I get comments on the YouTube channel, "Hey, I've paid into social security. I should be getting two checks, I've paid in railroad. I should be getting this, I should be getting that. This is a ripoff, it's a scam." I hear it all. So let me walk through you on how the benefits are calculated or what you should be receiving. All right? So let's just, to qualify for Railroad Retirement, real quick, I've done this numerous times, but you should know by now, five years is railroad service after 1995, you've done that. You're always going to collect Railroad Retirement, all right? That's important enough. 10 years before 1995, you're always going to collect Railroad Retirement. If you haven't done that, you're into Social Security. All right?
Now real quick, how do you qualify for Social Security? Right? 40 Social Security credits. Basically, one credit is a quarter of work, right? The quarter is three months every year, right? So four credits a year. So 10 years of work, you're into Social Security. All right? So there's a lot of people, "I've done some railroad time, I've done some social security time, so I should be getting two checks." Well, we'll walk through this. So it's important to remember, this only is referencing Social Security and Tier one portion, right? Tier two is separate, completely different, so I won't get into that. So tier one is equal to your 35 highest earning years of Social Security and railroad. That will give you what your tier number, tier two, right? The Railroad Retirement Board pays that amount to you, right? All the checks come through the Railroad Retirement Board. All right?
So a dual monthly benefit, right? Because you have Social Security and Railroad Retirement, that's what we're talking about here saying I've paid in is reduced by the amount that Social Security pays. Okay? So you're saying, "Oh, I've got a big tier one amount, and then Social Security's going to pay part of that." So let me just give you the example so it won't get as confusing. So let's say your tier one amount, right? I got Social Security and Railroad Retirement, that's going to be worth $3,000. You check with the Railroad Retirement Board, $3,000 a month. Then you go online to Socialsecurity.gov, ssa.gov, and you pull up your social security statement and it says, I'm getting $2,000 a month from Social Security. So right, 3000, 2000, that should have $5,000.
No. What you're going to get is the $3,000, all right? They're going to send you a check for $3,000. And so what happens is the tier one gets reduced by the Social Security payment for $2,000. Social Security will pay into the Railroad Retirement Board to cover that. So it's $3,000. So $3,000 plus $2,000 in Railroad Retirement Board math equals $3,000. All right?
So there you go. There's no dual benefits, so to speak, so you can't really collect the tier one and Social Security at the same time. You can collect Social Security and tier two at the same time, but that's a different video for a different time. So I hope I cleared up this confusion. There's no collecting both at the same time. Sorry. That's the way it is. Feel free to reach out to me if you're at or near retirement and you have some questions about, "Hey, I got some Social Security earnings and some Railroad Retirement earnings, how does that all work?" Reach out to me, we can go over some of that stuff, go through that boarding for Railroad Retirement process. Really great stuff there.
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