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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Field123 on October 23, 2014, 08:55:21 AM
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Does anyone have any experience or know anything about Railroad Retirement?
What I do know is that if you work for a railroad company, you pay into the RRB rather than Social Security; which results in a much higher benefit at retirement age. My specific question is, would this be worthwhile consideration in choosing to accept a job at a railroad if the goal is FIRE in ~ 10 years?
My research on the subject is fairly limited so far, but from what I can tell, you vest in RRB after 5 years of employment. Does this mean after 5 years SS is totally replaced by RRB, or would you receive a smaller payout from both? Any information would be appreciated.
The reason I ask is an opportunity has presented itself for me to leave my current job at a midsize law firm to join a large railroad. Compensation would probably be equal, maybe even a little less. The highlights are the benefits - railroad offers a 401k program ($18,000 contribution max + 3.5% match), while the law firm only offers SIMPLE IRA ($12,000 yr max), and the big wildcard is railroad retirement board and pension. Everyone I talk to says that these railroad benefits cannot be beat, but I wonder how this logic is affected when the goal is to retire at 40, not 60?
All input is appreciated!
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http://www.rrb.gov/forms/opa/ib2/ib2_ann_components.asp