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I've Saved Nothing for My Railroad Retirement Thumbnail

I've Saved Nothing for My Railroad Retirement

Tier 1 Tier 2 Annuity Retirement


You saved nothing for railroad retirement. Learn why it's not as bad as you think. 

Welcome everyone to another edition of the Highball Advisors railroad retirement whiteboard. My name is John McNamara, of Highball Advisors. And today's topic is about railroaders, who haven't put any money away for their retirement. So I thought what I do is just kind of walk through a fictional railroader who you know, just hasn't done any savings at all for retirement and just kind of, maybe it will help some individuals just to understand where they are. And it may, we'll give you some ideas. All right. So right. They've saved nothing. Okay. They're career railroaders and they've saved nothing. Maybe they're married or something, right. And there could be, or it could be things coming up, right. It could have divorce issues. That's why they have no money. Might have healthcare issues. Hopefully it's not a lifestyle issue because they're living large. Or my other big thing is cars and trucks and nothing destroys wealth, like brand new cars and trucks.

But that's another video which I do have, but you know, that lifestyle, whatever. They've just saved, nothing for retirement. Okay. So what I'd like to do is kind of like, Hey, don't get so down on yourself, let's look at where you guys really are as career railroaders. What, what can you do? Right. It's not too late. So it's not so bad in that. Right. Is that you still been putting away 4.9% of your salary into tier two and it's an asset. Treat it as an asset. A lot of railroaders treated it as a tax. It's not, it's an asset. All right. So just picture, imagine, right. If you're married and let's say you're 30, a 30 year railroader, you're married. Okay. This tier two annuity is worth in excess of $700,000 bang. Right? All of a sudden, now you have an asset, you know, obviously you can't take it to the bank, but tactically it's worth like $700,000.

Right. So now you have something there, right? So maybe you're 50 years old or something, and you've got, you know, five or 10 years or 10, probably 10 years left. Right. Let's take advantage of those remaining years, even if it's five years, whatever, knowing that, okay, I've got tier one, I've got this asset of tier two. Let's get, let's try to get it fixed here as we get into retirement. Right. So how can you do that? Max out that 401k it's free money. The company is matching it. Okay. Usually 3%. Some companies are even more right. Take advantage of that. So if you've maxed that out, that's great. Another one is the HSA. If you can do that triple tax-free, that's great. Finally, right? That's on the saving side. So you got to get the budget together, right? Get the budget together, understand where the money's going in and out.

You know, a guy like Dave Ramsey or somebody like him. He has a lot of good programs. There's people out there that can help you out with budgeting. And then, you know, and once you have the budget, you gotta stop the spending. These, these two are filled up, especially that 401k. You got to make sure that's good filled up. But what I really want to show in this video is, Hey, listen, you have this asset. You're getting, you know, if you're a career, railroader use that as your base. Right? Look at the bright side, the tier one, tier two will be great. You'll have this, but take advantage of these remaining years to to sock some money away. Right? Cause you're gonna need that rainy day money in retirement. You don't know if it's going to be for healthcare or a purchase or whatever it's going to be. So I hope you found this video helpful. Please subscribe to my YouTube channel. I appreciate that click on the little notification bell to get the latest video. And I do appreciate everybody and all their kind comments that they do give me about the videos and I do read them and I do appreciate it. So thank you very much on that. Railroaders, until next time, please stay safe, stay on track and take care so long everybody.


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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.