Those
railroad retirement annuitants subject to earnings
restrictions can earn more in 2005 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, which ranges from age 65 for those
born before 1938 to age 67 for those born in 1960
or later.
For those under full retirement age throughout
2005, the exempt earnings amount rises to $12,000
from $11,640 in 2004. For beneficiaries born in
1940 and attaining full retirement age in 2005
(age 65 and 6 months), the exempt earnings amount,
for the months before the month full retirement
age is attained, rises to $31,800 in 2005 from
$31,080 in 2004.
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 2005, 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 applicable to disability
annuitants do not change in 2005.
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.
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