I am planning to retire in 2017. I am a 38 year railroad employee and qualify for the 60/30 railroad retirement. My problem is how to maximize my spouses retirement because she is 2 1/2 years younger than I am. My wife Evelyn has paid into social security for 30+ years, but is not eligible for early social security until age 62. Evelyn does qualify for spousal railroad retirement at age 60, but if she waits until age 62 her social security payment will exceed the railroad tier I thus giving her a larger payout. Is there any way Evelyn can retire at age 60 on her spousal railroad annuity and claim the social security at age 62 with the new file and suspend rules? Or would it be best for her to maximize her retirement benefits and work until age 62, which is against her wishes.

Hi,

Just to preface, I am a retired Social Security technical expert, and we had no training in the specifics of the Railroad Retirement Program. As a result, you may want to double check my answers with Railroad.

That said, I do have a reasonably good understanding of the inter-relationship of Social Security (SS) and Railroad (RR) benefits. Railroad Retirement benefits consist of 2 tiers. Tier 1 is a rough equivalent of Social Security, while tier 2 is like a company pension based solely on their RR work and earnings.

If your wife qualifies for and starts railroad spousal benefits at age 60, she can still apply for Social Security benefits at a later date. If her Social Security benefit amount is higher than her tier 1 RR benefit, the Social Security payment would replace her tier 1 benefit, raising the total amount payable. If the Social Security rate is lower than the tier 1 rate, the tier 1 benefit would simply be offset dollar for dollar, resulting in no net gain.

Social Security delayed retirement credits may be earned even while a person is receiving RR retirement benefits, so it may well be best for your wife to wait until age 70 to apply for her Social Security benefit. That is when her Social Security benefit will reach the maximum rate, and would thus give her the highest total monthly benefit rate.

By the way, I'm not sure why you mentioned file and suspend, but there doesn't appear to be any reason for your wife to file and suspend her Social Security benefits.

Best, Jerry