How Will My Part Time Contracting Job Affect My Railroad Retirement?

Welcome everyone to this edition of Highball Advisor Railroad Retirement Mailbag. I'm John McNamara of Highball Advisors. Today's question comes from Hilltop Mason, who asks: "I work for the railroad and also part-time job as a contractor. Are you saying that both my Social Security and Railroad Retirement Tier One benefits would be combined to help increase my benefit when I retire?"

Yes, that's correct. When the Railroad Retirement Board calculates your Tier One benefit, it includes both your railroad service and your Social Security work. For 2024, the maximum annual amount you can contribute towards Tier One/Social Security is $168,600. For example, if you earn $100,000 from railroad work and $68,600 from Social Security work, it will all combine for that year. If your combined income exceeds $168,600 due to having multiple positions, you can recoup any Social Security overpayments on your tax return. Check out my video on how to recoup your excess railroad retirement tax withheld for more details.

I hope this helps, railroaders! Feel free to reach out with any questions, and I’ll make a video to answer them.

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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.