Ask Larry

Is It Possible To Have Social Security Transfer My Earnings To Railroad Retirement?

Hi Larry,

I have worked most of my carreer in Social Security paying jobs. However I have started working as an engineer for a shortline and plan on putting atleast 10 years of service (if I can.) When I retire, what happens with my Teir 1 contributions? Is it possible to have SSI transfer my earnings from SSI into RR? I have heard that I can choose which system will provide the better payout but I wanted to be sure. If SSI happens to payout better, what happens to my Teir 2 contributions? Thanks for your information. -- Bill

Hi Bill,

No, you can't ask Social Security (SS) to transfer your earnings to Railroad Retirement (RR), or vice versa. That doesn't mean, however, that your Social Security earnings couldn't be used to calculate your RR pension, or vice versa.

If you don't end up with enough RR credits to qualify for RR benefits, Social Security can use your RR earnings to calculate your Social Security retirement benefit amount. I'm not an expert on RR benefits, but my understanding is that the Railroad Retirement Board (RRB) can use a person's Social Security covered earnings to calculate their Tier 1 benefit amount.

If you apply for both SS benefits and RR benefits, the RRB would offset your Tier 1 benefit rate dollar for dollar by the amount of your SS benefit. The reason for that is that since the RRB can use your SS earnings when calculating your Tier 1 RR rate, if you could draw both SS benefits and a full Tier 1 RR benefit you'd at least potentially be receiving double credit for the same earnings.

Tier 2 RR benefits aren't affected by the receipt of SS benefits. Therefore, it sounds like what you'll ultimately be eligible to draw is a) the higher of your SS or Tier 1 RR benefit rate, plus b) any Tier 2 RR benefits for which you may qualify (https://rrb.gov/NewsRoom/NewsReleases/ReportingEvents).

Best, Jerry

Posted: 
Aug 19 2020 - 9:59am
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