Should I File Social Security Instead of Railroad Retirement?

Transcript:

Learn when you might want to take Social Security instead of Railroad Retirement.

Welcome everyone to another edition of the Highball Advisors Railroad Retirement Whiteboard. My name's John McNamara of Highball Advisors. And in today's topic, we're going to talk about Social Security and Railroad Retirement. So we're always under the mindset take Railroad Retirement, take Railroad Retirement, but there're certain times, I must say that you should be looking at Social Security. There're certain situations that are unique, but that you should be looking at Social Security. So I thought I'd go and highlight a few of these and see if they might apply to your situation.

So just to refresh everybody, Social Security is going to be your top 35 non-railroad earning years. That will be your Social Security payout amount. All right? Now, your tier one takes your top combined 35 non-railroad years and railroad years and that makes your tier one. All right? And also the other thing I put down here in the notes is, remember, you can never collect Railroad Retirement when you're working for the railroad because tier two is always growing and that type of thing. So you can't ever collect that.

So let's get into the four reasons that you might want to take Social Security instead of Railroad Retirement. The first one is if you have a minor or a disabled child, you got to take Social Security. The Railroad Retirement Board isn't going to pay out on that; however, the Social Security will. So that'd be one situation there. Perhaps you're still working for the railroad to have reached full retirement age. So you can go collect Social Security and it won't be as a significant amount, perhaps depending upon the number of years of service, but you can collect your Social Security while you're working for the railroad and not turn on your Railroad Retirement. Always remember though, you're going to have those deductions for work. Well, I shouldn't say that you have no deductions because you're at the full retirement age.

So that's something to think about there. Perhaps your spouse has reached full retirement age. All right. So that type of thing where, hey, I'll collect the spousal portion of it and then flip over to my Railroad Retirement when I retire. So that's something they think about there too, turning on that Social Security. And then finally this one here, and you can check out my video, Social Security and Railroad Retirement goes through a lot of this also here. And we'll put a link into that video. It's depending upon how many years of service you have. So it might be something where you may start out in Railroad Retirement and collect Social Security later. I always like to run it out to 70 and then collect those delayed retirement benefits.

Meanwhile, I'm collecting my tier two. So that's definitely a strategy you want to think about depending upon the years of service. If you're 20 years above in the railroad then that's not really applying to you, but those people that do five, 10, perhaps 15 years, you can look at this Social Security and Railroad Retirement strategy. So these are four times that I outlined that where you might want to look at Social Security instead of Railroad Retirement. So I hope you found this helpful. Reach out to me, especially as you're nearing retirement. These are the discussions that we're going to have. We'll talk about that in the boarding for Railroad Retirement process and the things I do to help railroaders get ready for retirement. That boarding for Railroad Retirement process. Subscribe to my YouTube channel. I'd appreciate that and share this especially if you know people in this situation with other railroaders, I'd appreciate that. Until next time, everyone, please stay safe, stay on track and take care. So long everybody. Bye.

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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.