The 64 Year Old Railroader's Dilemma: Why Claiming Social Security Early While Working Usually Backfires

Understanding Early Social Security at 64

Yes, you can apply for early Social Security retirement benefits at age 64 through the Social Security Administration. However, there are two major consequences to consider if you are still working full time for the railroad.

1. Early Retirement Reduction

If you begin Social Security before your full retirement age (FRA), your benefit will be permanently reduced due to age. This reduction does not go away—it lasts for life.

2. Earnings (Work) Reduction

Because you’re still working full time, your benefit may also be temporarily reduced due to Social Security’s earnings limit. If your wages exceed the annual threshold, Social Security will withhold part—or potentially all—of your benefit.

That means you could face:

• A permanent age-based reduction, and
• A temporary earnings-based reduction

In some cases, this results in receiving little to no actual payment while still locking in a permanently reduced benefit.

How This Impacts Railroad Retirement

This is where things get even more complex.

When you eventually retire from railroad service and file for benefits with the U.S. Railroad Retirement Board (RRB), the RRB will coordinate with Social Security. Your Tier I railroad retirement benefit is designed to mirror what you would receive under Social Security.

If you already started collecting Social Security early, the RRB will determine that you began drawing the Social Security portion of your Tier I benefit. As a result, your Tier I benefit may be permanently reduced to reflect that early election.

In other words, starting Social Security early can create a ripple effect that impacts your future railroad retirement income.

Is Starting Early the Right Move?

Many railroaders assume it makes sense to start Social Security early while continuing to work—but in most cases, that strategy requires careful analysis. The coordination between Social Security and railroad retirement benefits is complex, and decisions made today can have long-term consequences.

Before filing, make sure you understand:

• The permanent age reduction
• The earnings test while working
• The impact on your future Tier I railroad retirement benefit

Thoughtful planning can help you avoid unintended reductions and maximize your lifetime benefits.

If you’re a railroader with a question about Social Security or railroad retirement, consider seeking guidance before making a decision. These choices are often irreversible—and getting them right can make a significant difference in your financial future.

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.