I am paying $330 per month tax (tier 2). For about a $42 per month benefit 17 years from now. (Currently 50 yrs old)
To recoup what I paid in I would have to collect until I was 75 years old. 82 years old if you factor in what the railroad contributes to tier 2.
An annuity with $330 per month contribution @ 6% would pay out $51 per month.
How is this a good deal?
I am the one making 4100 per month plus my wife’s retirement. Yes I made more than you later in my career. I retired as a locomotive engineer and my last few years were over 100K per year. I didn’t always make this much of course. I cannot speak for other crafts, but those in transportation I know generally have very good retirements. For most railroaders RRB is much better that Social Security. I have friends that retired from factory jobs and their retirement checks from Social Security are very small compared to RRB. One person I know worked 46 years for the same company and his check is only 1400 per month. It would be very hard to live a decent lifestyle without significant savings just on Social Security.
Here’s the disconnect, the person that worked 28 years and gets 4100 a month must make a lot more money than my craft or at a lot of overtime. We don’t get overtime and the most I’ve ever grossed was 67000 so based off the best 5 years yeah your right your retirement will be a lot better than social security but not in my case.
If old heads work past their retirement it’s not because the retirement is bad. I worked with a conductor and the difference between what he was making and his retirement was only about 50 per week. He kept working because he liked his job and his social life was connected to his friends at work. The retirement is good, much better than Social Security. That’s the only reason I am staying.
The retirement is so good that old heads work way past their expiration date and pass away not collecting a dime.
My wife worked all her life and her RRB portion is more than Social Security. The person in here bashing RRB apparently doesn’t know any retired personnel or has his facts wrong. Getting to draw RRB is the only reason I stayed until retirement. It’s a much greater benefit than social security.
RRB pays sick pay and disability too if ya need it.
Don’t forget that you AND your wife can retire at age 60 with full pension, compared to 67 or higher for full social security, PLUS the railroad pays 80% medical insurance for both of you for 5 years until you start medicare. That is way more compensation at an earlier age than working until your later 60’s. Every year is precious, but especially the years over 60.
The only people that benefit from RRB retirement are workers that started around the age of 30 AND their spouse never worked or didn’t work enough to to draw social security. Everyone not in that group gets a mediocre retirement at best. Personally I started at 37, I’ve worked since I was 15 years old, my wife has worked since she was 16. My retirement will be around 3000 a month and my wife gets 0 because her social security will be more. I can draw 2500 a month in social security so for me, I’m not impressed whatsoever.
Not sure where you are getting your figures. I just retired at 60 with 28 years service. I make 4100 and my wife’s portion is 2000. It’s a pretty good retirement income especially with my own retirement contributions.