Will My Wife Get a Unreduced Railroad Retirement Survivor Annuity if I Miss My 30 Years?

Welcome, everyone, to another edition of the Highball Advisors Railroad Retirement Mailbag. I'm John McNamara with Highball Advisors, and today’s question comes from Claude M. He asks, “What happens if I pass away with 29 years of service, and my wife is under 60? Will she be able to draw my annuity, and will it be reduced since I don’t have 30 years?”

Great question, Claude. It’s definitely concerning when you don’t hit that 30-year mark, but here's how it works:

Your wife will be able to receive the survivor annuity, even before she turns 60, but there are some conditions. If she’s caring for minor children or disabled children, she can start receiving the survivor benefit before age 60. However, once she turns 60, she will begin receiving a reduced annuity due to the fact that you didn’t reach 30 years of service.

Now, this can be a tricky situation, and it’s worth considering options to bridge the gap. One strategy some people use is life insurance—not just through your employer, but also potentially term life insurance—to help fill that gap between what’s lost with the annuity reduction.

If you're looking for more ways to hedge against this kind of risk, check out my video on how to replicate the loss of a Railroad Retirement Survivor Annuity. It will provide more insight into strategies to help your family if something like this happens.

I hope you found this information helpful! As always, feel free to send in your questions, and I’ll make sure to address them in a future video.

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.