Railroad Retirement Board
Retiree Earnings Limits to Rise -
2007
October 2006
Those railroad retirement annuitants subject to earnings
restrictions can earn more in 2007 without having their benefits reduced, as a
result of increases in earnings limits indexed to average national wage
increases.
Like social security benefits, some railroad retirement
benefit payments are subject to deductions if an annuitant’s earnings exceed
certain exempt amounts. These earnings
restrictions apply to those who have not attained full social security retirement
age. For employee and spouse annuitants,
full retirement age ranges from age 65 for those born before 1938 to age 67 for
those born in 1960 or later. For
survivor annuitants, full retirement age ranges from age 65 for those born
before 1940 to age 67 for those born in 1962 or later.
For those under full retirement age throughout 2007, the
exempt earnings amount rises to $12,960 from $12,480 in 2006. For beneficiaries attaining full retirement
age in 2007, the exempt earnings amount, for the months before the month full
retirement age is attained, rises to $34,440 in 2007 from $33,240 in 2006.
For those under full retirement age, the earnings deduction
is $1 in benefits for every $2 of earnings over the exempt amount. For those attaining full retirement age in
2007, the deduction is $1 for every $3 of earnings over the exempt amount in
the months before the month full retirement age is attained.
When applicable, these earnings deductions are assessed on
the tier I and vested dual benefit portions of railroad retirement employee and
spouse annuities, and the tier I, tier II, and vested dual benefit portions of
survivor benefits.
All earnings received for services rendered, plus any net
earnings from self-employment, are considered when assessing deductions for
earnings. 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 additional 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 continue to be applicable to
disability annuitants in 2007.
Regardless of age and/or earnings, no railroad retirement annuity is payable for any month in which an annuitant (retired employee, spouse or survivor) works for a railroad employer or railroad union.
Public Affairs 312-751-4777
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