Railroad Retirement Benefits Provide a Secure Future
Did you just start working for the railroad? If so, congratulations. You just started a career path that many envy. One of the main reasons many people would love to work for the railroad is its excellent retirement benefits. Currently, according to AARP, our nation is feeling an increase in retirement insecurity.
There are a few reasons for this increase in retirement insecurity in America. A primary reason is that nearly 78 million American workers (both public and private) have no access to any retirement plan at work. A work retirement plan is considered the most effective way to save for retirement. Since the economic downturn, many people cannot afford to save for retirement on their own. Retirees worry they will face receiving less than enough money to meet their basic needs. Currently, the average working-age household has only $3,000 saved in retirement accounts, while the typical near-retirement age working household has just $12,000 saved. To better understand the context, a near-retired employee’s savings amount is less than the average annual Social Security benefit earned by retired Americans of $15,190. Pensions are fundamentally different from savings because you cannot outlive the guaranteed monthly income provided by your retirement.
No matter how long you may live, you can be sure that your pension check will continue to come every month. Savings, on the other hand, can run out. If you work for the railroad, you receive a pension after ten years of employment (5 years if you started after 1995.) Your railroad retirement plan is essential in supplying a reliable, steady source of income in retirement. For those without Social Security, a pension may be their only source of a guaranteed, inflation-adjusted monthly payment, making them even more critical. Also, your railroad retirement benefits pension provides other benefits, such as disability protections and benefits for your spouse, should you die first. Each of these characteristics is what makes railroad retirement better than most defined contribution plans.
According to AARP, Recent public opinion research has found:
• More than eight out of ten Americans are worried about their ability to retire.
• 80% believe that the decline of pensions has made it more challenging to achieve the American Dream.
• More than eight in ten Americans would participate in a “new” pension system if offered.
• 82% of Americans believe that all workers should have a pension plan.
Another critical feature of the railroad retirement plan is that it helps the economy. This is because when you receive your railroad retirement benefits, you spend them in your local economy. Thus, the business where you make that purchase sees an increase in its profits. This means that they might be able to expand their business, which in turn creates more jobs. “It’s a classic “win-win” situation for employees, employers, taxpayers, and local business owners,” says the AARP.
Railroad retirement benefits are watched closely by the National Association of Retired and Veteran Railway Employees or NARVRE. The sole purpose of NARVRE is to represent your interest in Washington by protecting and preserving your railroad retirement benefits, and they will also represent you personally if necessary. Additionally, NARVRE keeps you informed of any developments affecting your railroad retirement benefits through its legislative representatives and monthly newsletter. It is recommended that as soon as you are employed by the railroad, you become a member of NARVRE. If you are currently employed or retired and still not a member, reach out to a local affiliate or find NARVRE on Facebook, Instagram or Twitter.
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