Railroad Retirement Planning

30/09/2026

Railroad Retirement: Do You Know What You’ll Actually Take Home?

You've spent decades working on the railroad. But do you understand how your retirement benefits are
calculated and how much you'll actually keep after taxes?

Railroad Retirement consists of two primary components:

Tier 1: Similar to Social Security, Tier 1 is calculated using your combined railroad and Social Security
earnings history. Your retirement age and earnings history affect your monthly benefit.

Tier 2: Similar to a pension, Tier 2 is calculated using your highest 60 months of creditable railroad
earnings, your years of railroad service, and a 0.7% multiplier.

For example, if your highest 60 months average $10,000 per month and you have 30 years of railroad
service:
$10,000 × 0.7% × 30 years = $2,100 per month in Tier 2 benefits.

This example assumes all earnings are within the applicable annual Tier 2 limits.

Now, what about taxes?

Understanding how your benefits are taxed is just as important as knowing what you'll receive.

Tier 1: The Social Security-equivalent portion is taxed similarly to Social Security. Depending on your
combined income, up to 85% may be subject to federal income tax.

Tier 2: Generally taxed as ordinary pension income, although a portion may be tax-free depending on
your employee contributions.

Here's the real question: Are you planning around your gross Railroad Retirement benefit or what
you'll actually take home?

Understanding how your benefits are calculated, how they're taxed, and how they fit into your overall
retirement plan can make a significant difference.

If you're approaching retirement, let's sit down, review your numbers, and develop a strategy.

Zach Wetta | The Martin Financial Group
Email: [email protected]
P: 316-308-3408

29/09/2026

Weekly Market update for week of September 28th, 2026.

15/09/2026

Keeping cash makes you feel good but it’s value is eroding. If in retirement consider 3-5 years of income in a non- correlated to market assets or fixed income for down periods. Have 6-12 months of monthly need set aside in high interest money market.

If you’re working and saving- have an emergency fund in high yield money market 3-6 months depending on income, the rest put to work. Call or email me @ 316-308-3408 or [email protected]

11/09/2026

Weekly Market Update 2026-9-11:
- Inflation
- Oil
- Solid Economic Growth

31/08/2026

Weekly Market Update for 2026-8-31

19/08/2026

2026-8-19 Weekly Market Update

05/08/2026

2026-8-5 Weekly Market Update

05/08/2026

2026-8-5 Market Update

29/07/2026

Market Update for 2026-7-29: Fed held rates steady!!

27/07/2026

UP Railroaders- tomorrow at 4:00 pm CST hop on a zoom for 401(k) education, Health Insurance and Railroad Retirement Q&A! Call or email me with questions at: 316-308-3408 or [email protected]

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