Learn when you can start 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 when you can start your railroad retirement. That benefit, that annuity. I get this question a lot of time. A lot of people think as soon as I start retirement, as soon as I say I'm retired, I expect to get my railroad retirement annuity. It's not the case.
So there's a lot of different participants that are eligible for the annuity. So I thought I'd just kind of walked through this and we will give you a good idea of when you can start your annuity and then you can plan for it. It's all about planning at the end of the day. So if you're an employee of the railroad, 60 and 30. Age 60 with 30 years of service, you can start your annuity then as long as you've retired. That's the point. You have to have left the railroad. If you're still working, you can't start your annuity.
Then if you have five years of railroad service after 1995 or 10 years before 1995, you could start... Your earliest start date would be 62. However, there would be age reductions in there. So at 62 it would be 30% less up to your full retirement age where there is no reduction at the full retirement age. So 62 for those with less than 30 years of service. So as you can see, the guys with 30, guys and gals with 30 years of service, fantastic.
Now, let's see who else here, because it starts... This gets a little more difficult here. Spouses, right? Spouse can only start once the employee has been retired and receiving their annuity. So if the spouse is let's say 62 and the railroader was 56 and retired, doesn't matter. Got to wait for that railroader to start with the annuity. So have to be... That's important. Have to be receiving that annuity. Very, very important.
Then you have to be married one year. So that's important. Then this I thought was interesting. So if the spouse is working for the railroad and wants to collect a spousal annuity, that spouse has to leave the railroad. I don't know why, but that's what happens. You have to leave the railroad to collect your spousal annuity if you're working for the railroad also. So I thought that was interesting.
Then also, you can collect it if... Let's say if you're 60 and 30, unless caring for a minor child. So you can get it at 60 if you're caring for a minor child. Then 62 with less than 30 years also, unless you're caring for a minor child. So if you're married to a 60 and 30 railroader, you can get it at 60, which is great. Then if you're married to somebody with less than 30 years of service, you can collect it at 62. Obviously there's going to be reductions once again and then that's stipulated by unless you're caring for a minor child. Same-sex couples can also... The spouse of a same sex couple, they can get spousal annuity.
Then let's go on to divorced spouses, because this kind of gets tricky also. So you don't have to wait for them to retire, but the railroad has to be over the age of 62 to get your divorce spouse annuity. You have to be married at least 10 years and not currently married also. So you can't pick and choose which spouse benefits you want to get. Once you're married that's it.
Then you have to be over the age of 62. So right there, you don't get that 60 and 30 benefit. You have to wait over 62 and then also you have to be divorced for at least two years also. With the divorced spouse annuity, you're only really getting the tier one portion. 50% of the tier one is the amount that it's set. You're not getting 50% of the railroader's. That's just the amount that they use. Then also, there's no child benefit for the divorced spouse annuity. That's important. So you have to work through that.
I left out the tier two portion of the annuity. That all gets settled, by the way, in the divorce decree. That's kind of a asset that gets divided up by the courts there. So I hope you found this helpful. It's a good thumbnail sketch of when you can get your railroad retirement benefit for employees, spouses, divorced spouses, that type of thing.
So feel free to reach out to me if you're at or near retirement. We can go through a lot of these things. A lot of timing issues. Very, very important. Please click on my notification bell, the like button also to share this with other railroaders. I do appreciate that. Until next time everyone, please stay safe, stay on track and take care. So long everybody. Bye.
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