Railroad Retirement Benefits to See Significant Rise in 2023
Most railroad annuities, such as social security benefits, will rise in January 2023. The increase is due to a Consumer Price Index (CPI) from the third quarter of 2021 in accordance with the period of the current year.
Cost of living increases are calculated in both tier I and tier II portions of railroad retirement annuity. Tier I benefits such as social security will increase by 8.7 percent, which is also the percentage of the CPI increase. This is the most significant increase since 1981, when it rose to 11.2 percent.
Tier II benefits will go up by 2.8 percent, which is 32.5 percent of the Consumer Price Index. Vested dual benefit payments and supplemental. Annuities also paid by the Railroad Retirement Board (RRB) are not adjusted for the CPI change.
In January 2023, the typical railroad retirement employee annuity will increase by $215 a month to $3,344, and the average combined benefits for an employee and spouse will rise to $304 a month to $4,838. Those eligible for the aged widow(er)s are also eligible for an increase. They can expect an additional $120 a month to $1691.
Widow(er)s whose annuities are being paid under the Railroad Retirement and Survivors’ Improvement Act of 2001 will not receive the 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. Some 49 percent of the widow(er)s on the RRBs rolls are being paid under the 2001 law.
If a railroad retirement or survivor annuitant also receives another form of government benefit, such as a public service pension or social security, any cost-of-living increase in that benefit will offset the increased tier I benefit. Yet, tier II cost of living increases are not reduced by increases in other government benefits. If a widow(er) whose annuity is being paid under the 2001 law is also eligible for an increased government benefit, their railroad survivor annuity may decrease.
In late December 2022, the RRB will be mailing notices to all annuitants that provide a breakdown of the annuity rates payable to them in January 2023. If you have additional questions, please visit the RRB website at www.rrb.gov.
Source: Gary Faley
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