How Much Does My Railroad Retirement Tier 2 Increase Each Year?

Welcome, everyone, to another edition of the Highball Advisors Railroad Retirement Mailbag. My name's John McNamara of Highball Advisors, and today's question comes in from a High Jinks. He says, "I'm at 45 years and counting. How much does my tier two increase with each additional year of service?"

Well, first of all, 45 years, fantastic so it's going to be probably a little bit minimal. So just to refresh everybody, the tier two formula is years of service times your 60 highest earning months of railroad service times .007. All right? So additional year is just another variable in that calculation. So at 45 years, it's just going to move it up a little bit. Percentage-wise, I should say, not as much as say, from 10 to 11, to give you an example.

But it's important also to remember where we think about the tier two, just remember it's those 60 months of the highest earnings, right? So if something happens in your railroad career, try to stick it out even if you have to take a lower position, because maybe you had the 60 months of high earnings, all right? As opposed to tier one, which is 35 years so that's something to think about.

Check out my video on what you need to know about tier two and railroad retirement and that will go through a lot of that. All right, railroaders? So send in your questions. I'll shoot a video on them. And until next time, everyone, please stay safe, stay on track, and take care. So long, everybody. Bye.

Associated Video: "What You Need to Know About Tier 2 in Railroad Retirement" https://youtu.be/UEQ8QH5eWgA

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