My Wife Is Retiring with 30 Years; When Should I Start My Railroad Retirement

Railroad Retirement Mailbag: How Social Security Interacts With Spousal Benefits

Welcome back to another edition of the Highball Advisors Railroad Retirement Mailbag. I’m John McNamara with Highball Advisors, and today’s question comes from Brian O’Brien.

Brian asks:

“My wife will retire from a railroad job at age 60 with 30 years of service. I have not worked in the railroad industry and would like to retire after age 60. I understand how Tier I and Tier II spousal benefits are calculated, but I’m unclear on how my Social Security benefits would be calculated if I retire at 60.

As the spouse of a railroad employee with 30+ years of service, would my Social Security benefits receive no age reduction, or would they be reduced by the full 30% as if I retired at 62?”

This is a great question—and a very common point of confusion.

Understanding the Difference Between Spousal Benefits and Social Security

You’re correct that you can begin your railroad spousal annuity at age 60. At that point, you would generally be eligible to receive:

• 50% of your wife’s Tier I benefit
• 45% of her Tier II benefit

However, your Social Security benefit is completely separate from your railroad spousal annuity.

If you choose to start Social Security at age 62, it would be subject to the standard early-retirement reduction—up to 30% less than your full retirement age benefit. Railroad service does not eliminate or reduce that age-based Social Security penalty for non-railroad spouses.

A Smarter Long-Term Strategy

In many cases, it may not make sense to claim Social Security early. Your Tier I spousal benefit could be larger than your reduced Social Security benefit, especially if you claim Social Security at 62.

Instead, a more strategic approach may be to:

1. Begin your spousal annuity at age 60
2. Allow your Social Security benefit to grow until full retirement age—or even as late as age 70
3. At that point, replace the Tier I spousal benefit with your own Social Security
4. Continue collecting your Tier II spousal benefit, which is not offset by Social Security

This approach can often result in a higher lifetime income, depending on your personal numbers.

Final Thoughts

If you’d like a deeper dive into how Social Security and Railroad Retirement interact, I recommend watching my video, “How Social Security Benefits Affect Your Railroad Retirement.” It walks through these offsets and strategies in much more detail.

Railroaders, I hope you found this question helpful. If you have a question of your own, feel free to send it in—I may feature it in a future post.

Until next time, stay safe, stay on track, and take care.

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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.