What You Need to Know about Spouse Benefits for Railroad Retirement

Transcript:

Understand what you and your spouse need to know when it comes to 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 are going to talk about the spousal annuity, love the spousal annuity, big fan of the spousal annuity. Really great benefit for Railroader's. No doubt about it. All right. Let's walk through it and we'll discuss everything about it. We know a Railroader gets tier one and tier two. What does the spouse get? 50% of the Railroaders tier one. And 45% of the tier two. That's fantastic to tier two right there to get 45% is really, really great stuff. That's just that one side. Then the other bonus, if that wasn't good enough is the full retirement age for a spouse is 60 if the Railroad has 30 years of service. Normally your full retirement age might be 67. Hey, fast forward, seven years, your full retirement age is now 60. That's great stuff. Obviously age reductions will apply if you're less than 30 years of service. There are two tremendous benefits of the spousal annuity right there.

And then the other important thing here also is that the spouse annuity can start at any age, if you're caring for a child under 18, or if you have a disabled child, they can start at any age. That's really a nice feature there for the child caring. That's something there. Now we looked over here. Here's some requirements got to be married at least one year. That's important. Getting married. And then same sex marriage is also allowable. And then the other thing is if you have a child with somebody you're not married with, that's also eligible. That is technically counts, I guess. And then this one here, spouse annuity can be reduced by their own benefits. What does that mean? What I'm talking about there is, as I said, you have 50% here is the spouse benefit.

But if you have a spouse that has a higher amount, let's say, they've been working or whatever, that you don't get that on top of it. Whatever the higher amount is what that part of the tier one's going to be. Just give you an example, if the spousal benefit was going to be 1000 dollars a month, but yet their social security was going to be $2,000 a month, they would get the $2,000. They wouldn't get the 1000 dollars and the $2,000. Just wanted to let you know about that. And then finally, the other big one here is spouse annuity, the tier one portion, not to tier two. Tier one can be reduced for non-covered pensions. If you've been working, let's say, as a teacher or something that hasn't been paying into social security, your spousal annuity is going to get reduced for the non-covered pension. Government pension offset. Really great to understand that as you plan for your guaranteed retirement income, and your retirement plan.

A lot of great benefits, especially for those Railroads over 30 years, even though it with less, just to get that extra two for the spouse makes you almost want to go out and get married. Just on that benefit alone. If you're nearing retirement, reach out to me, we'll go through this in the boarding for Railroad Retirement assessment, really understand, drill down, understand that Railroad Retirement income, really great building block for a great retirement. Subscribe to my YouTube channel, click on the notification bell to get the latest video, share this with other Railroaders, getting a lot of great feedback. I really do appreciate that. Keeps me going until next time, everyone please stay safe. Stay on track and take care so long everybody. Bye.

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