Is your spouse leaving money on the table in railroad retirement.
Welcome everyone to the Highball Advisors railroad retirement whiteboard. My name's John McNamara. I'm going to talk about, I was reading some information from the railroad retirement board. They put out press releases and, uh, some real informational stuff. Do you ever get on their website? A lot of good stuff there. Take a look at it. But one of the things they were talking about with spousal annuities and it's, it shocked me that they said a large number of spouses actually don't even apply for their annuities. I was like, wow, I didn't even think about that. So I thought I just walked through this on maybe why they're doing it. And then, you know, some of the implications thereof and work through an example, that type of thing. So we can get those spouses on those railroad retirement annuities. I mean a lot leaving money on the table. It had shocked me, but let's just go through it. So I looked at it and some of the reasons that they said that they weren't applying was well, they, you know, they might have a career in they're collecting social security. So, you know, why do I need railroad retirement? I have my own social security. And then some aren't even aware that there's a spousal annuity. So, you know, you're working in the railroad. Yeah. Well, you know, him or her, he was working for the railroad. I I'm doing my own thing. So why do I participate? Well, no, there's a spousal annuity. Right. So right there. So those are two points now as it works, right. There's certain things that you have to know about, uh, uh, about the railroad retirement annuity. And let's talk about re tier one, right? So your tier one portion of the spousal annuity will get reduced for social security, right? And that's based on your own earnings, uh, your tier one would get reduced or based on the railroaders earnings that will also affect how much is in your tier one. Right. And then also, maybe you're working for the state local federal government. You might have a pension that would, uh, reduce your, uh, tier one also.
So those are the, some of the things that go into that tier one, uh, formula. Um, and then on the tier two side, there's no offsets at all. So there's no reductions like there isn't tier one, no offsets and straight 45% of the railroaders tier two. Right? Whatever that amount is. So let's w let's, we'll look up an example, right? Great way to learn. So we'll just take Mary, right. Is she's married to a railroader who's, let's say 60 and 30 and retired her husband, uh, in this case collect $1,600 a month from tier one and $1,200 a month in Tier two; now Mary's been working and she says, okay, well, I'm going to retire. I'm 62 years old, I'm going to retire. And she calls US social security board. What can I get from my social security? And she can get $850 a month from social security. So how does that affect the railroad retirement? So Mary's railroad retirement, okay. Is going to be $850 of social security, right? That's going to be quote her tier one. She's not going to really get tier one. It's going to be the $850 to social security, right. That dollar for dollar offset, however, no offsets, right in tier two, she's going to get $540, which is 45% of the $1,200. So her retirement income by herself is going to be $1,390. Right. So she didn't know about the tier two, right. She would still get the $850, but she'd be leaving $540 a year. In which case that's a, uh, that's, you know, $6,500 a year, you know, do the numbers. Number of years retired, 20, 30 years. That's a significant amount of money. So, um, I know maybe a lot of you are aware of the spousal annuities, but those who aren't please share this video with people, let them know that there's these spousal annuities out here. So maybe next time, the next time railroad retirement board, doesn't have to publish a letter saying that there's a spouses out there not collecting their spousal annuities.
So I hope you found this helpful reach out to me. If you need a railroad retirement planning advice. Uh, always good with that. Subscribe to the YouTube channel, like to see the channel growing, click on the bell icon to get the latest notifications as I put out new videos. And the meantime, everyone, please stay safe, stay on track and take care so long. Every body Bye.
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