Will My Rental Income Reduce My Railroad Retirement?

Welcome, everyone, to another edition of the Highball Advisors Railroad Retirement Mailbag. I’m John McNamara from Highball Advisors, and today’s question comes from a viewer who goes by “Loud American.”

The question is: If I own rental properties, is the income from those considered investment income?

This ties into an important topic: work deductions on your Tier I Railroad Retirement annuity. Specifically, we're looking at whether rental income counts as earned income—which would trigger a reduction in your Tier I benefits if you're under full retirement age and still collecting income.

Here’s the good news: Typical rental income is not considered earned income, so it wouldn’t result in work deductions on your Tier I benefits. However, there’s a nuance here—if you’re actively managing a portfolio of rental properties as your job, especially through an LLC, the Railroad Retirement Board may classify that as earned income.

So it’s important to clarify your specific situation with the RRB to avoid surprises. I also recommend checking out my video “Should I Work in Railroad Retirement?” for a deeper dive into these work reduction rules.

Hope you found this helpful! Keep sending in your questions, and I’ll continue to create videos that address them.

Until next time—stay safe, stay on track, and take care. So long, everybody!

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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.