Most railroad retirement annuities, like social security benefits, are scheduled to increase in January 2013 on the basis of the rise in the Consumer Price Index (CPI) from the third quarter of 2011 to the corresponding period of the current year.
Cost-of-living increases are calculated in both the tier I and tier II benefits included in a railroad retirement annuity. Tier I benefits will increase by 1.7 percent, which is the percentage of the CPI rise. Tier II benefits will increase by 0.6 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 (RRB) are not adjusted for the CPI rise.
In January 2013, the average regular railroad retirement employee annuity will increase $32 a month to $2,386 and the average of combined benefits for an employee and spouse will increase $45 a month to $3,417. For those aged widows eligible for an increase, the average annuity will increase $19 a month to $1,249. However, widowers whose annuities arebeing 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 35 percent of the widowers on the RRB’s rolls are being paid under the 2001 law.
Click here to read the full Railroad Retirement benefits increase release from the RRB.
Retiree Earnings Limits to Rise in 2013
Railroad retirement annuitants subject to earnings restrictions can earn more in 2013 without having their benefits reduced as a result of increases in earnings limits indexed to average national wage increases.
Like social security benefits, some railroad retirement benefit payments are subject to deductions if an annuitant’s 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 2013, the exempt earnings amount rises to $15,120 from $14,640 in 2012. For beneficiaries attaining full retirement age in 2013, the exempt earnings amount, for the months before the month full retirement age is attained, rises to $40,080 in 2013 from $38,880 in 2012.
Click here to read the full Retiree earnings limit increase release from the RRB.