Will My Wife Lose Her Railroad Retirement Tier 2 by Not Paying into Social Security?

Welcome to another edition of the Highball Advisors Railroad Retirement Mailbag. I’m John McNamara of Highball Advisors. Today’s question comes from Milli H. who asks: "My wife works for the University of Illinois and does not pay into Social Security. She earns a salary similar to mine as a railroad conductor. Will she qualify for the Tier II spousal benefits?"

First, it's important to note that Railroad Retirement Tier II benefits are not affected by whether your spouse pays into Social Security. Only the Tier I portion is impacted by whether or not the spouse pays into Social Security, due to something called the Government Pension Offset (GPO). Additionally, the salary amount does not determine eligibility for the spousal annuity in Railroad Retirement; she will always receive the spousal annuity regardless of her earnings.

For more details, check out my video on two ways to minimize the effects of the GPO on your railroad retirement benefits. It provides a lot of useful information and can help clarify some of these complexities. I hope you found this video helpful. Feel free to send in your questions. 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.