You just got another job offer, or maybe you're just thinking about a career change. Watch this video to understand the things you want to think about before you switch out of the railroad industry.
Welcome everyone to another edition of the Railroad Retirement Whiteboard. My name is John McNamara of Highball Advisors. And today we're going to talk about leaving the railroad, right? Should I leave the railroad? You'd be surprised the number of phone calls and emails that I get on people trying to understand their options of possibly leaving the railroad. Maybe they had another offer or they're just looking to change up their direction in life, I guess. And they asked me, "Hey, what should I be thinking about when I analyze about leaving the railroad?" So I thought I'd do a video on it and just give you some topics that you want to have in your head as you make this decision.
So starting over here on my right, your left, is first right, is tier two, right. Unique to the railroad industry. Railroads get it. And what are you giving up? that guaranteed retirement income stream. Very valuable. I talk about a lot. Then, okay, well, now that you don't have this retirement income stream, you got find, put a replacement value on it, right? So, that's going to determine how many years are you in the industry already. That's going to determine the value of that, of your tier two annuity. The longer the years in, the more costly it is to replace that income stream.
Also, tier two, the spousal benefit. The spouse can get tier two also. So that's like two income streams there. So that's very valuable. And you got to put a replacement value on that. Finally, the survivor annuity. So if you're not part of the Railroad Retirement Board and something unfortunate happens to you, your spouse, won't receive a railroad retirement survivor annuity. They be thrown into social security. All right. So that's the value there, right? You can quantify that. That's very valuable.
Let's go to the next part. Early retirement. Railroaders full retirement age for railroads for 30 years is 60, which is fantastic. And then the spouse also full retirement age is 60 with 30 years of service. So that's great. Social security is 67 years old. 1960 and above obviously, before 1960, you can do it earlier. But so that's seven years of a full retirement benefits. Once again, you can quantify that value. Getting full retirement benefits at 60 versus 67, very valuable. And also we don't really know what's going to happen with social security in 2035. There's going to be some adjustments to social security going forward. So we'll see what happens there.
Then the other things that you want to factor in, okay, outside of railroad retirement benefits. Equity, right? Maybe you have some restricted share units or performance share units, other equity that has invested yet. You might be leaving that on the table. Do the math on that. Salary, that's kind of straightforward. Apples to apples. Am I going to be making more by leaving? You kind of always want to keep moving up. So also, maybe you have a pension. You want to have that pension, the railroad. Some railroads still have some pensions. That's a valuable something there because some railroads, you can even do an early retirement at 55 with a pension, which is great. And then finally, one of the most important one here, I saved the best for last, is lifestyle. At the end of the day, railroading is hard business. Okay. It's tough, especially very tough now. Maybe a lot of travel involved, that type of thing. So the effects on the family, effects on you, also. Right? You want to be enjoying your life. That's for sure.
So these are the topics that I would be thinking about if I was going to make that decision about leaving the railroad. So I hope you found this useful, this information. Give you something to think about. Reach out to me, schedule a railroad retirement assessment. If you need any help with that, please subscribe to my YouTube channel. I appreciate that. And also give the thumbs up to this video and put your comments in. And I'll also, I'll get back to you on that. So in the meantime, everyone, please stay safe, stay on track and take care. So long, everybody. Bye.
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.