How Earnings Affect Payment of Survivor Annuities
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
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.
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Year 2013 Annual Earnings Amounts
If you attain full retirement age (FRA) in 2013, you can earn up to $40,080
through the month preceding FRA and not lose benefits. For every $3 earned over
$40,080, you lose $1 of benefits.
If you are under FRA for the entire year 2013, you can earn up to $15,120 and
not lose benefits. For every $2 earned over $15,120, you lose $1 of benefits.
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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 2013 are $1,260 for those
under FRA, and $3,340 for individuals who have attained FRA. The monthly limit
for individuals who have attained FRA applies only to months in the year prior
to the month in which FRA is attained. Different rules apply to self-employed
individuals subject to the monthly test. The amount of time spent in
self-employment during a month, as well as the nature of work performed, is
considered in determining whether the special one-year rule applies.
Here's an example of the special one-year rule. Ann Smith retires at age 62 on
August 25, 2013. 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 2013 limit of $15,120, Ms. Smith will receive her full railroad retirement
annuity for September through December because her earnings in those months are
less than $1,260, the monthly exempt amount. Beginning in 2014, 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 2011 - 2013
A summary of the annual earnings exempt
amounts and the special one-year monthly exempt amounts is shown below.
test applies in the calendar year in which a beneficiary
attains full retirement age, but only to the months prior to the month
the beneficiary reaches FRA.
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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
- 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
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