2017 RRB "Love Letter"

Hear ye, hear ye, all Railroad Retirement annuitants.

Tier I will go up .03% (that's three tenths of one percent); Tier II by .01%.

But guess what; Medicare Part B is also going up - .03% to a max of $134/mo.

Some who just retired and to whom Tier II represents a greater portion of their monthly annuity than those who did so a while back could be looking at a monthly decrease.

Happy New Year from your friendly Railroad Retirement Board.

LOL! After my Medicare Part B increased and the .03% increase to Tier I & .01% increase to Tier II made my tax rate increase I ended up with $2.16. I hope I don't spend it all in one place. Let's not forget the past few years without any increase.

For those of us working our Tiers went up for 2017.

Although the tax rates are the same, Tier I maximum earnings subject to tax increased from $118,500 to $127,200 (out of pocket $7,347 to $7,886). Tier II maximum from $88,200 to $94,500 (out of pocket $4,322 to $4,630).

I wonder when someone on The Board might start asking why Tier II, which is supposedly tied to gains within the private sector's equity markets, go up only .01% when the S&P during 2016 was up 9.50%.

Just think; what if the Tier II "ostensible Trust Fund" was slapped into anybody's S&P 500 Index Fund (mine is with State Street's "Spider" SPY)?

Gilbert B Norman wrote:I wonder when someone on The Board might start asking why Tier II, which is supposedly tied to gains within the private sector's equity markets, go up only .01% when the S&P during 2016 was up 9.50%.

Just think; what if the Tier II "ostensible Trust Fund" was slapped into anybody's S&P 500 Index Fund (mine is with State Street's "Spider" SPY)?

That is a good question. Seeing only the Tier I which is our equivalent to Social Security is subject to the same increase even that got a .03%. The Tier II is our pension. If it's tied to the private sector equity market it definitely was up way more than .01%. I didn't get any notification of any increase from RRB till the last week of 2016. The Tier II should be at least based on an average for the year. 2016 started out slow then it was mediocre then ended up big, rounding it out it's more than .01%. RRB survived the mass downsizing of the '50s thru the '90s and it's still solvent. It's not based on the so-called Baby Boomer crisis that Congress cries about with Social Security & Medicare. Railroads still hire a new generation to replace the older one.

Anybody got their RRB "love letter" for 2021 yet?

Sure wish mine would make the scene.

But lest anyone wonder, the RRTA Tier I increase is to be 1.3% (2020 amount X 1.013); Tier II an "oh SOOO generous" .04% (2020 amount X 1.004).

Tier II COLA increases are tied to the CPI index used for FICA/Tier I. Specifically, the annual Tier II adjustment is that CPI index multiplied by .325. In other words, the value of your Tier II relative to your cost of living will continue to decline. Be thankful for this era of low inflation; the higher the rate of inflation, the faster it'll fall.

If you have your 30 years and retire (or plan to) at 60, RRB is a pretty good gig. For those who don't hit the magic number, it ain't. The fact that Class I employment has fallen 30% in the last five years begs the question: Can RRB survive in the long-term? To me, it doesn't make sense that the federal government maintains a separate retirement system for small and rapidly shrinking segment of the workforce. I suggested in this forum once that RRB should be phased out (with vested employees protected), and you'd think I was advocating the torture of puppies.

"I got the loot" yesterday. OK; so the $$$$ there in amount I estimated less some twenty cents.

"Big Deal", I know.

But my "post '81 industry afterlife" was that of a CPA; and I would like the "love letter" so I can "tie it out" - Tier I, II, Med B, and IRMA - EXACTLY!!!

Finally, regarding Mr. Cowford's observation, last I heard was that RRTA is "adequately" funded; especially compared with Social Security, where it is no longer a whether, but when, that must come begging to Congress for an annual appropriation. But I wholly agree that with an industry employing some 1.5M when RRTA was first enacted, to 130K today (even less once Precision Railroading is fully implemented on all roads, AND when Amtrak finally rationalizes it's LD system), there is little sense in maintaining a separate agency solely for the administration of a separate retirement plan (OK; educators have their own; but there are a few more of 'em around than there are railroad employees).

disclaimer: author Long UNP

Gilbert B Norman wrote: ↑Sun Jan 03, 2021 9:16 am "I got the loot" yesterday. OK; so the $$$$ there in amount I estimated less some twenty cents.

"Yeah Rah, Rah; got the letter today. Why I am getting "docked" twenty cents a check will remain a mystery.