The Railroad Retirement Board (RRB) reports that most Railroad Retirement annuities, like Social Security benefits, will increase in January 2009.
The RRB also reports that those Railroad Retirement annuitants subject to earnings restrictions will be able to earn more in 2009 without having their benefits reduced, as a result of increases in earnings limits indexed to average national wage increases.
Most Railroad Retirement annuities are scheduled to increase in January 2009 on the basis of the rise in the Consumer Price Index (CPI) during the 12 months preceding October 2008, RRB said.
Cost-of-living increases are calculated in both the Tier I and Tier II benefits included in a Railroad Retirement annuity. Tier I benefits, like Social Security benefits, will increase by 5.8 percent, which is the percentage of the CPI rise. Tier II benefits will increase by 1.9 percent, which is 32.5 percent of the CPI rise.
(The vested dual benefit payments and supplemental annuities also paid by the Railroad Retirement Board are not adjusted for the CPI rise.)
In January 2009, the average regular Railroad Retirement employee annuity will increase $92 a month to $2,101 and the average of combined benefits for an employee and spouse will increase $126 a month to $2,956.
For those aged widow(er)s eligible for an increase, the average annuity will increase $55 a month to $1,115.
However, widow(er)s whose annuities are being paid under the Railroad Retirement and Survivors Improvement Act of 2001 will not receive annual cost-of-living adjustments until their annuity amount is exceeded by the amount that would have been paid under prior law, counting all interim cost-of-living increases otherwise payable.
About 31 percent of the widow(er)s on the boards rolls are being paid under the 2001 law.
Retiree earnings limits to rise
Like Social Security benefits, some Railroad Retirement benefit payments are subject to deductions if an annuitants earnings exceed certain exempt amounts. These earnings restrictions apply to those who have not attained full Social Security retirement age.
For employee and spouse annuitants, full retirement age ranges from age 65 for those born before 1938 to age 67 for those born in 1960 or later. For survivor annuitants, full retirement age ranges from age 65 for those born before 1940 to age 67 for those born in 1962 or later.
For those under full retirement age throughout 2009, the exempt earnings amount rises to $14,160 from $13,560 in 2008. For beneficiaries attaining full retirement age in 2009, the exempt earnings amount, for the months before the month full retirement age is attained, rises to $37,680 in 2009 from $36,120 in 2008.
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 2009, 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.
Special work restrictions continue to be applicable to disability annuitants in 2009. The monthly disability earnings limit increases to $770 in 2009 from $730 in 2008.
For more information, contact your nearest office of the Railroad Retirement Board or log onto www.rrb.gov.
