Will I Get a Bump in My Railroad Retirementby Delaying the Start Date?

Welcome to another edition of the Highball Advisors Railroad Retirement Mailbag! I’m John McNamara from Highball Advisors, and today’s question comes from Jim S. He says, “I’m 63 and have been with the railroad for almost 14 years. I’m thinking about leaving the railroad to either do something else or lay low until I turn 67, when I would start drawing my railroad retirement. I understand my Tier 2 portion won’t increase, but won’t my Social Security portion still go up from 63 to 67, whether I work or not?”

Great question, Jim! It’s good that you’re considering the impact on your Tier 1 benefits. First off, your Tier 1 portion, which is based on Social Security, will continue to increase, even if you’re not working. However, your Tier 2 portion will freeze, meaning there will be no increase to it until you start collecting your railroad retirement. Once that starts, any adjustments will be based on inflation.

Also, keep in mind that if you decide to lay low, it depends on what you're doing. Be cautious about breaking your current connection to the railroad, as that could impact your survivor annuity if you take on certain types of work.

For more details, check out my video Understanding the Impact of Early Railroad Retirement, which covers many of these important topics.

I hope you found this video helpful, Jim! Feel free to send in any questions, and I’ll make a video to address them. Until next time, everyone, stay safe, stay on track, and take care! So long, everyone! Bye!

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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.