Get On Track: Railroad Retirement and Social Security
Written by: Aaron Garcia
Reviewed by: Ed McClane, Licensed Insurance Agent
The Railroad Retirement Board (RRB) works with Social Security to provide retirement and disability benefits for qualified railroad workers and their qualified survivors.
If you’re already receiving railroad benefits or Social Security, you’ll be automatically enrolled in Medicare when you turn 65. If you are not yet collecting benefits at age 65, then you will need to contact your RRB local office for assistance and guidance.
You can start drawing railroad retirement at age 60 with 30 years of experience, but applying before full retirement age means you’ll receive a reduction if you don’t have enough years of service.
What is Railroad Retirement?
Railroad retirement is a retirement and disability plan for railroad workers who spent enough of their careers in the industry to qualify. Designed and administered by the Railroad Retirement Board (RRB) since the 1930s, railroad retirement is the only private retirement system administered by the federal government.
Do you qualify for railroad retirement benefits?
The high-level criteria for receiving railroad retirement from the RRB is relatively simple. You qualify for railroad retirement benefits if you:
- performed creditable railroad service for 10 years.
- performed creditable railroad service for five years, if that work occurred after 1995. [i]
The RRB also breaks down the benefits into tiers (Tiers I and II) and awards them based on employee and employer tax withholdings. All qualified beneficiaries enter Tier I, but not all Tier I recipients have enough creditable earnings to receive Tier II benefits.
Benefits aren’t limited to full-time, daily employees; workers get credit for a month’s worth of railroad service for any amount of time worked within that month, even if it’s a single day’s work. If you have any questions about your eligibility or benefits, contact your local RRB field office. [i]
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How do railroad and social security benefits work with Medicare?
One of the enormous benefits of receiving railroad retirement is how well it works with Social Security and Medicare. Quick history lesson: The Railroad Retirement Act of 1934 didn’t just protect railroad workers–it laid the groundwork for Social Security the following year. Because of this, the Social Security and the Railroad Retirement Board work together to administer benefits and track earning credits.
When it comes to Medicare Parts A and B, railroad retirement beneficiaries receive the same benefits as other Americans, but there are some significant differences to know. They are:
Railroad retirement and Medicare
If you receive railroad retirement benefits, chances are the Medicare process will be easier for you than most. Because Social Security doles out Medicare benefits, that close relationship between the RRB and Social Security typically means:
- You’re automatically enrolled in Medicare at age 65 if you’re receiving RRB benefits. You’ll receive Original Medicare (Parts A and B) but can still decline it to go with a Medicare Advantage option.
- Your monthly premium will be automatically deducted from your RRB payment — no bill to keep track of each month.
- You’ll contact your RRB office for help instead of the local Medicare office. Just like the Medicare offices, you’ll be able to handle a lot of your administrative needs through your local RRB field office.
When can I start collecting railroad and social security benefits?
When you can start drawing your railroad retirement benefits depends on your years of service. You can begin receiving your benefits:
- At age 60, if you have 30 or more years of qualified work, or
- At age 62
You’ll need to apply through your local RRB office when you decide to begin receiving your benefits. The agency will begin processing your application up to three months before your benefits start date, so make sure to plan. [i]
Like Social Security, you may receive a reduced benefit amount if you start drawing from it before full retirement age. And like Social Security, that age is 67 for those born in 1960 or later.
Can you get railroad retirement and social security benefits?
The answer is yes, but you won’t receive both payments. Remember, railroad retirement works with Social Security, not in addition to it. That means your RRB benefit subtracts the amount you receive from Social Security.
For example, let’s say your RRB monthly annuity payment is $1,000, and your Social Security payment is $800 per month. The RRB will reduce its amount by $800. The upside? Railroad retirement is often more generous than social security.
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