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Ney- The first thing you need to do is go to the Railroad Retirement Board website at www.rrb.gov and do some research. In an effort not to see you totally confused I'll try to give you a few things that I know about the process. Railroad Retirement was created in an era of strong railroad unions and relatively weak companies in the financial sense. When railroads went under, in those days, the company pension wasn't worth anything. So a system was created under a new agency the U.S. Railroad Retirement Board (keep in mind that this was long before the New Deal and the creation of the Social Security system.) The goal of this new system was to provide a way of guaranteeing railroad pensions for employees. The system (RRB) was funded by payroll taxes levied on both employer and employee creating the precursor of the more modern Social Security Administration. The RRB also provides unemployment and sickness benefits and handles Medicare/Medicaid in much the same way the SSA does, but I'll stay away from that here as it unduly complicates this discussion (if you do hire out be aware of this and consult your local chairman or other more experienced employee in the event of sickness or furlough) As time passed the system evolved, today the payroll taxes take the form of two Tiers, not surprisingly referred to as Tier I and Tier II. Both employer and employee pay Tier I which is the equivalent of Social Security at the same rate(currently 6.20% of your pay, see http://www.rrb.gov/g34.html). Both employer and employee also pay into Tier II, but at different rates (employee 4.90% and employer 14.20%). Both also pay into RUIA (unemployment at 1.45%). As you can see, railroads and railroaders pay quite a bit more into the RRB than most employers pay into SS. Back in 2000 the new RR Act went into effect lowering the time for vesting in RRB from 10 years to 5. That is the biggest change for a new hire. Other changes included that a portion of the Railroad Retirement Fund could be invested in the financial markets under the supervision of a newly named investment board. Also, spousal annuties were improved by becoming the same as the RRers in the event the RRer dies before the spouse. There are other changes, but you'll need to do that research or if you do hire out, learn as you go as many of us have. After 5 years in the RRB system you will be vested and all that money you have from SS will transfer to your account with RRB. It will become part of your RRB retirement. See the RRB page at http://www.rrb.gov/opa/ib2/ib2_ret.html for a more full explanation of all the various retirement annuities. There are additional rules listed there. Instead of your "Social Security Statement" of payroll tax contributions you will receive Form BA-6 each year. The BA-6 is the RRB version of the Social Security Statement. Read it carefully and note any discrepancies. I hope this gives you a start. It is not intended to be inclusive. LC
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