Hi Larry,
Thank you for all the information you give us regarding Social Security. I am one of those rare people who worked for a railroad for more than 10 years and I also qualify for social security. My question is, can i "take" early retirement (age 62- my FRA is 66 , 4 months) by going to one agency and then when I reach FRA going to the other agency. Are there any other important points or rules that could help me determining the best course of action. My current age is 59.
Thank you very much

mark

Hi Mark,

You can file separately and at different times for Railroad Retirement (RR) benefits and Social Security (SS) benefits, but whether or not that is optimal for you depends on many factors, particularly the length of time you worked in railroad employment. If, for example, you have 30 years of railroad work, you can get unreduced benefits starting as early as age 60.

Railroad retirement benefits consist of 2 tiers. Tier 1 is roughly an equivalent of Social Security, and tier 2 is based strictly on railroad earnings. Think of tier 2 as a company pension separate from Social Security.

If and when you apply for SS benefits, your SS benefit will be calculated using just your Social Security earnings. Instead of paying you directly, Social Security will 'certify' your benefit to the Railroad Board (RRB). If you have also filed for RR benefits, RRB will then determines your combined benefit. Your SS benefit will be offset against your railroad tier 1 benefit, and unless the SS benefit is higher than the tier 1 benefit, you will end up receiving the same total amount. Furthermore, since some states tax social security benefits and not railroad retirement benefits, you may simply be trading tax exempt income for taxable income by filing for Social Security benefits.

You should be able to find out your potential RR benefit rates by calling RRB at 1-877- 772-5772. Social Security's toll free number is 1-800-772-1213, but they won't be able to give you an accurate benefit estimate until shortly before you reach age 62.

All of that said, if your SS benefit is higher than your tier 1 railroad benefit, it may well be optimal for you to wait until age 70 to apply for Social Security. You can still accrue delayed retirement credits on your Social Security record from full retirement age until age 70, even if you are already drawing railroad retirement.

Best, Jerry