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Straight
Track #57 Returning To Work While Receiving
Railroad Retirement Benefits Hoey
& Farina
info@felahfd.com
1-888-425-1212
After years of hard work or as a result of an injury,
you are receiving annuity benefits from the U.S. Railroad Retirement
Board. Perhaps the benefits
aren't enough financially? Perhaps
you simply miss being among the workforce?
The fact is - you're considering going back to work.
It may be back in the rail industry - at another railroad or at a
labor organization. It may be
somewhere outside the rail industry, to try your hand at something else
you've always had an interest in. Or,
it may be to start your own business.
Whatever the circumstances, it's an important decision, one that
could effect the benefits you, and your spouse, are receiving.
We'd like to provide you with the following information to help you
make a more informed decision and offer you a better understanding of life
after retirement on the railroad.
An employee annuity can
consist of any or all of the following benefits: Tier I, Tier II or Vested
Dual Benefits. An employee
may also be receiving a supplemental annuity.
A spouse annuity can consist of a Tier I and a Tier II benefit.
The first thing you need to consider is how any other
earned income effects your annuity payments.
If you decide to work for another
railroad or labor organization, your monthly annuity would not be
payable during those months. And,
if you earn more than $25 during any month as a local lodge employee, that
would make those months non-payable.
If you are receiving an age & services annuity, or a
spouse annuity, and you decide to work
outside the rail industry, the part of Tier I based on railroad work
after 1974 and Social Security Act employment and the Vested Dual Benefit
component would be subject to limitations.
Specifically, if you earn more than the exempt amounts, your
benefits are subject to the deductions charted below.
|
Age
|
Annual
Exempt Wage Earnings
|
$
Earned Over Exempt Wages
|
$
Deducted
|
|
Between 1-01-XX
Retirement Age and The Month You Attain Full Retirement
|
$25,000
|
$3.00
|
$1.00
|
|
Under Full Retirement Age
|
$10,680
|
$2.00
|
$1.00
|
Thus, no matter where you
work, inside or outside the rail industry, keep in mind:
1.) There is a Special
One Year Rule if you retire under full retirement age.
During the your first year of retirement, if in any of the
remaining months of that year you earn less than $890 a month, even though
your earnings for that year might have exceeded the limit, you will
receive a full annuity for those months.
2.) Total earnings consist of
all wages from all employers,
including net earning from self-employment.
3.) Income, from sources
such as from stocks, rental properties, interest, etc., is usually not
considered wages.
4.) Expected earnings over the annual exempt amount must
be reported to the Railroad Retirement Board promptly to prevent
overpayment and penalties.
5.) Your work for your last pre-retirement non-railroad
employer, must also be reported promptly to the Railroad Retirement Board.
6.) On Tier I, the dollar amount of your benefit will
never be less than what you would have received for your railroad service
through December 31, 1974.
7.) Once you attain full retirement age (currently age
65), no deductions will be made to your Tier I or Vested Dual Benefit
Components. However,
deductions may continue to apply to Tier II and Supplemental Annuities.
So now that you're aware of how returning to work would
directly effect your payments, let's discuss how it would directly affect
your spouse's. Whatever
earnings you have over the annual exempt amount will also subject your
spouse's benefits to a deduction.
Further, during months that you are not eligible to receive any
payments, your spouse will also not be eligible to receive any payments.
And, if your spouse works for their last pre-retirement
non-railroad employer, that, too, must be reported in a timely manner to
the Railroad Retirement Board.
With regards to you or your spouse's working for your
last pre-retirement non-railroad employer, that would subject Tier II
benefits and Supplemental Annuity payments to have an additional earnings
deduction attributed to them. (Normally
Tier II benefits and Supplemental Annuity payments are not subject to
deductions.) The deductions
will never be by more than 50%, but does apply to earnings that may not
have exceeded the Tier I exempt earnings limit.
We've discussed retirement annuities above, but what if
yours is a disability annuity? Basically,
the significant difference, and the most important to remember, is that
there are earning restrictions, up until the age of full retirement (even
if you had 30 years of service), that could affect your payments.
For example, if you earn more than $400 (after the deduction of any
impairment related work expenses) during any months, you will not receive
payments for those months. At
the end of the year, if you earned less than the $5,000 maximum, the
non-payments will be paid to you. If
you earned more than $4,800, beginning with the last $200 counting as
$400, for each $400 earned, one month's payment will be deducted.
It's important to remember while receiving a disability annuity
that you must report your earnings promptly to the RRB.
Failing to report earnings over $400 a month, to the RRB within 2
months, could lead to stiff penalties.
And one last thing to keep in mind when working on disability,
working to full age of retirement, or earning more than $5,000 yearly,
could give the RRB the perhaps wrong impression that you have
"medically recovered" from your disability and stop your
payments. It could be
reinstated after proving you are in fact still disabled.
As for your Tier I benefits while receiving a disability annuity,
they will be taxed in the same manner as a Social Security benefit.
Your amount of monthly benefits will not be negatively affected.
Aside from reaching "medical recovery" while
receiving a disability annuity, your annuity payments will stop upon your
death. Your spouse's annuity
payments will stop when your annuity payments stop, except if your
spouse's annuity benefit was for caring for a child.
Under those circumstances, the spouse's annuity payments would end
when the child reached the age of 18.
A divorce will also stop your spouse's annuity payments, although
your former spouse could attempt to qualify for a divorced spouse's
annuity that would continue until remarriage or receipt of Social Security
Benefits.
Whether you already are or are about to retire or go
onto disability, the more knowledge you have to protect yourself
financially, the better off you will be.
We hope you found this information helpful.
If, however, you have any other questions regarding RRB annuity
payments and working, please contact us for assistance at either (888)
425-1212 or info@felahfd.com.
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