Retirees who work can earn more in 2001
Railroad retirement annuitants who are under full retirement age and who work after retirement can earn more in the year 2001 without having their benefits reduced, as a result of increases in earnings limits indexed to average national wage increases.
Railroad retirement annuities generally consist of tier I and tier II benefits and may include certain vested dual benefit payments and/or a supplemental benefit. Like social security benefits, railroad retirement tier I benefits and vested dual benefits paid to employees and spouses, and tier I, tier II and vested dual benefits paid to survivors are subject to earnings deductions if post-retirement earnings exceed certain exempt amounts.
Legislation passed in April 2000 eliminated earnings deductions for those of full social security retirement age (age 65 in 2001). Deductions, however, remain in effect for the months before the month of full retirement age during the calendar year of attainment.
For those under age 65 throughout 2001, the exempt earnings amount rises to $10,680 from $10,080 in 2000. For beneficiaries attaining age 65 in 2001, the exempt earnings amount rises to $25,000 in 2001 from $17,000 in 2000 for the months before the month age 65 is attained.
For those under age 65, the earnings deduction is $1 in benefits for every $2 of earnings over the exempt amount. For those attaining age 65 in 2001, the deduction is $1 for every $3 of earnings over the exempt amount in the months before the month age 65 is attained.
Earnings consist for this purpose of all wages received for services rendered, plus any net earnings from self-employment. Interest, dividends, certain rental income or income from stocks, bonds, or other investments are not considered earnings for this purpose. Retired employees and spouses, regardless of age, who work for their last pre-retirement nonrailroad employer are also subject to an earnings deduction, in their tier II and supplemental benefits, of $1 for every $2 in earnings up to a maximum reduction of 50 percent. This earnings restriction does not change from year to year and does not allow for an exempt amount.
A spouse benefit is subject to reduction not only for the spouse's earnings, but also for the earnings of the employee, regardless of whether the earnings are from service for the last pre-retirement nonrailroad employer or other post-retirement employment.
Special work restrictions applicable to disability annuitants do not change in 2001.
Regardless of age and/or earnings, no railroad retirement annuity is payable for any month in which the annuitant (retired employee, spouse or survivor) works for a railroad employer or railroad union.
For more details, members can call the Board's automated toll-free RRB
Help-Line at (800) 808-0772 or by checking its Web site at www.rrb.gov.
© 2000 Brotherhood of Locomotive Engineers