August 22, 2014

Soc. Sec., Rail Retirement payments to rise in 2012

Retirees receiving Railroad Retirement Tier I or Social Security benefits will see their payments rise by 3.6 percent beginning Jan. 1 – the first increase in those benefit payments in two years.

Increases in Railroad Retirement and Social Security benefits are tied to the Department of Labor’s Consumer Price Index.

For railroad retirees, Tier II payments will rise by 1.2 percent, as the Tier II increases are calculated at 32.5 percent of the Consumer Price Index. Those receiving vested dual benefits payments, phased out in the early 1980s, and supplemental annuities will not see an increase in those payments.

Increases in Medicare Part B premiums will be announced by mid-November.

For railroad retirees who have not attained the full retirement age and are employed while receiving Railroad Retirement benefits, the maximum earnings not subject to a reduction will rise to $14,640 Jan. 1 from the current $14,160. The earnings deduction is $1 in benefits for every $2 in earnings over the exempt amount.

Railroad retirees, regardless of age, who work for their last pre-retirement non-railroad employer, are subject to an additional earnings deduction in their Tier II and supplemental benefits — $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.

For more information, contact your nearest Railroad Retirement or Social Security office.