Will My 401K Contributions Count as Work Deductions for My Railroad Retirement?

Welcome, everyone, to another edition of the Highball Advisors Railroad Retirement Mailbag. I'm John McNamara, founder of Highball Advisors, and today’s question comes from Frank R.

Frank writes:

“I’m an Amtrak conductor planning to retire in about a year. I’ll have my 30 and 60 at that time—congratulations, Frank! If I decide to take another job after retiring, and that job offers a 401(k), will my pre-tax contributions to the 401(k) count against the Railroad Retirement earnings limit of $19,000?”

Great question, Frank.

What you're referring to is the earnings limit under Tier 1 of Railroad Retirement, where if you’re under full retirement age, you can be subject to work deductions—$1 withheld for every $2 earned over the limit. That limit is actually a bit higher now—around $23,000 for 2025.

But here’s the key part: Pre-tax 401(k) contributions do not count toward that earnings limit.

So, for example, if you earn $30,000 at your post-retirement job and contribute $10,000 to a traditional 401(k), only $20,000 of that is considered "earned income" for Railroad Retirement purposes. That means only the income above the current limit (in this case, $23,000) would potentially be subject to Tier 1 deductions.

Just remember: deductions only apply to earned income above that limit, and your 401(k) contributions reduce the amount of income counted against it.

For a deeper dive, check out my video: “Should I Work in Railroad Retirement?” It covers the earnings limits, deductions, and what to watch out for.

Thanks again for the great question, Frank. If you have one you'd like answered, feel free to send it in, and I might feature it in a future video.

Until next time, stay safe, stay on track, and take care. See you soon!

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