Will My Wife Be Penalized Prior to Collecting Railroad Retirement?

Welcome everyone to another edition of the Highball Advisors Railroad Retirement Mailbag. I'm John McNamara, and today's question comes from Tailwind. He asks: "I've been collecting my railroad retirement for six years after 42 years of service. My wife is younger than me and still working. She would like to retire upon her 60th birthday. My question is, at what point prior to her 60th birthday should she resign from her current job? Also, will the earnings she's accumulated in the months prior to the railroad retirement start date be counted towards the $22,320 annual wage cap that affects Tier One?"

First of all, congratulations on 42 years of service! That's an incredible achievement. Regarding your questions:

• Tier Two Deductions: Since your wife will not be working past 60, there will be no Tier Two deductions to worry about.
• Tier One Work Deductions: Work deductions for Tier One only apply if she is working and collecting railroad retirement simultaneously. Therefore, the earnings she has accumulated before her retirement will not be subject to work deductions for Tier One benefits.

For more detailed information, check out my video on the first year of work in railroad retirement, which covers deductions related to age and work when it comes to railroad retirement.

I hope you found this video helpful. Feel free to send in your questions, and I'll make a video to answer them. Until next time, stay safe and stay on track. Take care, everyone. Bye!

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