Can You Draw Social Security & Railroad Retirement at the Same Time From Your Spouse?

The Railroad Retirement Act and the Social Security Act overlap to provide annuities and benefits to retired railroad employees, to their spouses and even to their divorced spouses under some circumstances. These acts are similar in some respects, but they're two separate programs. Railroad retirement benefits are typically more than those provided by Social Security – sometimes significantly – because railroad retirement taxes are higher for these workers.

A portion of a spouse's railroad annuity is offset or reduced if they're also entitled to collect Social Security, so railroad retirement "double-dipping" isn't technically possible. Yes, you can collect both, but one is subtracted from the other so you'll arrive at the same bottom line.

Spousal railroad retirement benefits are calculated according to two tiers. Tier 1 uses both the worker's Social Security credits and railroad retirement benefits, and this is the part that's subject to Social Security reductions.

A spouse's railroad annuity benefits can be further reduced if they haven't yet reached full retirement age and the railroad worker had less than 30 years of service. Full retirement age is roughly age 67 as of 2020, depending on the year of birth, but a spouse can begin collecting at age 62 subject to this additional reduction, just like with Social Security.

Divorced spouses of railroad workers are eligible for railroad annuities if the marriage lasted at least 10 consecutive years and the receiving spouse hasn't remarried. Both the spouse and the worker must have reached age 62. The working spouse must additionally be eligible for Social Security benefits if they haven't retired yet, and they must have been divorced for at least two years.

This is the portion that affects a spouse's annuity, because it's reduced for any Social Security benefits the spouse is entitled to receive, regardless of whether the Social Security work credits were earned by the spouse, the worker or even a previous spouse.

The calculation works out to roughly the same benefits as Social Security would pay because one is deducted from the other. It can also be reduced by any government pension or disability annuity the spouse is entitled to based on their own earnings.

Tier 2 of railroad retirement benefit calculations is based only on credits earned from railroad employment. It's essentially an additional amount that workers who are employed in other industries wouldn't be privy to, and it's not subject to the offsets and reductions that Tier 1 benefits are. This is why railroad benefits tend to be higher than Social Security benefits.

Currently married spouses are eligible for Tier 2 benefits, so overall, this can result in more money than drawing on just Social Security or collecting Tier 1 benefits alone. Divorced spouse's annuities are based solely on Tier 1 calculations.

Eligible spouses receive 50 percent of the worker's Tier 1 benefits before any reductions, plus 45 percent of their Tier 2 benefits before reductions. Reductions apply to their shares, so Social Security benefits would be deducted to arrive at the bottom line.