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You can work for a nonrailroad employer and still receive
survivor benefits from the Railroad Retirement Board. However,
your benefits will be reduced if you are under full retirement
age and earn over the annual exempt amount. Once you attain
full retirement age, no benefits are withheld because of
nonrailroad work, no matter how much you earn. Full retirement
age extends from age 65 for survivor beneficiaries born
before 1940, to age 67 for those born in 1962 and later.
A railroad retirement
annuity is not payable for any month in which you work for
a railroad or railroad labor organization. This rule
applies to all beneficiaries, regardless of age or amount
of earnings.
What
Earnings Count?
If you work for someone else, we count your gross earnings
to calculate earnings deductions. Gross earnings from employment
(normally shown in item 3 or item 5 on your Form W-2) are
all salaries, wages, commissions, bonuses and other payments,
before deductions, including deductions for income taxes,
social security taxes, insurance premiums, and contributions
to 401k plans.
If you are self-employed, we count only your net earnings
from self-employment. Net earnings from self-employment
(item 4 on Form 1040, Schedule SE) are gross earnings minus
expenses, less one-half of your self-employment tax.
We do not count non-work income such as investment earnings,
interest, pensions, gifts, inheritances, and capital gains.
Year
2004 Annual Earnings Amounts
If you attain full retirement age in 2004, you can earn
up to $31,080 and not lose benefits. For every $3 earned
over $31,080, you lose $1 of benefits.
If you are under full retirement age for the entire year
2004, you can earn up to $11,640 and not lose benefits.
For every $2 earned over $11,640, you lose $1 of benefits.
Special
One-Year Rule — Non-Work Months
No annuity payments are lost for any month in the first
year you are entitled to an annuity and have “non-work months.”
A “non-work month” is a month in which you do not earn over
a prescribed monthly limit, and do not perform substantial
services in self-employment. The monthly limits in 2004
are $970 for those under full retirement age, and $2,590
for individuals who have attained full retirement age. The
monthly limit for individuals who have attained full retirement
age applies only to months in the year prior to the month
in which full retirement age is attained.
Here’s an example of the special one-year rule. Ann Smith
retires at age 62 on August 25, 2004. She made $25,000 through
August. She begins a part-time job in October, and earns
$600 per month. Although her earnings for the year exceed
the year 2004 limit of $11,640, Ms. Smith will receive her
full railroad retirement annuity for September through December
because her earnings in those months are less than $970,
the monthly exempt amount. Beginning in 2005, only the yearly
limits will apply to Ms. Smith because she will have already
used her special one-year rule eligibility.
Summary
of Earnings Limits 2002-2004 |
A
summary of the annual earnings exempt amounts and the
special one-year monthly exempt amounts is shown below. |
2004 |
$11,640 |
$970 |
$31,080 |
$2,590 |
2003 |
$11,520 |
$960 |
$30,720 |
$2,560 |
2002 |
$11,280 |
$940 |
$30,000 |
$2,500 |
An earnings
test applies in the calendar year in which a beneficiary
attains FRA, But only to the months prior to the month
the beneficiary reaches FRA. |
Reporting
Your Earnings
In most cases, we calculate how much to reduce your annuity
because of your earnings based on either the earnings estimate
you gave us when you applied for benefits, or on reports
submitted by employers to the Social Security Administration.
You do not have to report your earnings to us unless:
- You stop working;
- You start working and expect to earn more than the
annual exempt amount;
- Your employment is not covered under the Social Security
Act (i.e. FICA taxes are not deducted from your pay) and
you expect to earn over the annual exempt amount;
- Your earnings are from work outside of the United States;
- You work for a railroad or railroad labor organization;
or
- We ask for a report of your earnings.
Contact the nearest RRB office at any time during the
year if you think we are either withholding too much or
too little from your benefits because of your earnings.
|