Staying "Connected" for Railroad RetirementTier 2 Retirement
Everything you want to know about your current connection for railroad retirement.
Welcome everyone to another edition of the Highball Advisors railroad retirement whiteboard. My name's John McNamara of Highball Advisors. And today we're going to talk about your current connection for railroad retirement. Right? I get a lot of questions. A lot of inquiries about this. How does this work? Do I have a connection? Don't I have a connection. So I thought maybe what I'll try here is to do a little visual interpretation of this, and it should really cover about 95% of current connection issues.
All right. So let's just on the left-hand side. This is just retirement, right? This is you're collecting your railroad retirement annuity. I got the little dollar sign there, right? This is where you're collecting your retirement. So just from the big macro point of view, in order to keep your current connection, right, that means you've left the railroad. Okay. And you need to keep that current connection in order to get right. Your survivor annuity and any disability, occupational disability, annuity it, current connections do not affect your railroad retirement annuity. It does affect your survivor annuity and disability annuity. Very important point. All right. So now what I want to focus on is keeping those survivor annuities very, very important for retirement planning and your family, obviously. So you need in, in 30 months, okay. Since you left the railroad, you need 12 months of service. Okay? So at the end of this 30 months, if you have 30 months before retirement, then bang, you're in great shape because you have 12 months of service. However, once those 30 months run out and the 12 months run out you and your open there, right. You have a possibility of losing your current connection and your survivor annuity. Right? So that's the important part, right? 30 months, 12 months of service inside a 30 months. Find that out.
All right. So now let's go to another part here, right? So let's say you leave the railroad and you don't work for another railroad, right? I mean, you have no non railroad work. Okay. So you don't, you know, you're just hanging out before your railroad retirement starts per se. You have no non railroad work. You're still connected. You're fine. So even if you're not at retirement yet, right. This gap here, it doesn't matter because you're not working. Right. And your last job was for the railroad. So you're still connected. Okay. So you have that gap. Now let's go to another case here. Right? You've left the railroad and you say, I'm going to start my own little company. I'm not going to be incorporated just may a little LLC type thing. Right. Self-employment okay. Or maybe I might get a job with the federal government, for the transportation department, perhaps may the FRA or something like that. Okay. You keep your connection, right. That means you have that survivor annuity. All right.
Now let's look at a bad scenario. Let's say you've left the railroad. Maybe you've been offered another job somewhere else. You left the railroad. Okay. And you do non railroad work automatically. Your current connection is splintered. You don't have it any more. So now you have risk on that survivor annuity. And so w what is that risk on the survivor annuity real quick? If something unfortunate is to happen to you the spouse who would be receiving the survivor annuity, you know, which is the tier two part would be put into so security. All right. So that's a lot of money that tier two that you've been paying in all those years goes away. All right. Very very, very detrimental.
Okay. Now, one more final example here. Let's say you get involuntarily terminated from the railroad. All right. And you're not offered another position inside the railroad. That's comparable, comparable position. Right. and you have 25 years. Okay. You can go work outside the railroad and so keep your current connection. So you can go take another position if you want, if you're in voluntarily terminated 25 years experience. And so keep the current connection. All right. So these examples probably cover about 95% of all the examples of current connections, right. The important part is right. 12 months of service inside these 30 months. Right. So if you're 30 minutes, 30 months before retirement, then you're fine. You're just going to have risk here if you're not 30 months away from retirement.
Okay. So reach out to me if you want, discuss this a little bit more; put your comments down below, I'll answer some of those comments, maybe put in your case, and I'll let you know if there's a current connection involved or not. Please subscribe to this YouTube channel, getting close to a thousand. Very exciting about that. Send in some questions also, and I can answer those and also feel free to sign up for the boarding for railroad retirement assessment. Very helpful. We'll help you understand where you are. If you're on track for a good railroad retirement or not. As always, most importantly, please stay safe, stay on track and take care so long . Every body Bye.
Get Free Railroad Retirement Assessment
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.