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RRB Annuity and Medicare Part B 2022 Increases

If you have been following the Railroad Retirement Board website ( or even the news, then you are aware of the upcoming increase in your retirement wage. Your Cost-of-Living part of your annuities will see a rise in January 2022. 

Garey Faley sent a message recently explaining the facts behind the increase he says, “The Cost-of-Living increases are calculated in both Tier 1 and Tier 2 benefits included in your railroad retirement annuity. The Tier 1 benefits such as Social Security benefits, will increase by 5.9 % which equals the percentage of the CPI rise. 

Tier ll benefits are subject to 32.5% of the CPI COLA so when you multiply the earlier 5.9×32.5%=1.9. So essentially you get a 1.9% increase applied to Tier ll. Unfortunately, you cannot just look at your monthly RRB deposit and apply the 5.9% increase to see what your 2022 deposits will be. As Garey Faley says, “They don’t make it that easy!” 

So, Mr. Faley goes a bit further in the message to help the readers understand the increase a little bit better. Here goes: If you look at your RRB statement mailed in December every year, it shows your monthly Tier l, Tier ll, and supplemental amounts. He divided the Tier l amount by the gross amount, and it came to 60%. He did the same for his wife’s and it came to 62%. To make the calculation easier (not necessarily completely correct) he figured that Tier l is 60% and Tier ll is 40% of the gross monthly annuity. So that 5.9% COLA applies to the tier l and the 1.9% applies to the Tier ll amount. 

From a financially point of view this is what it looks like: On average for every $1000 in annuity you receive, you get an average 60% of 1000 =600 x 5.9=$39.50 When you add Tier ll the calculation comes out to $7.60. So, for this calculation with very $1000 in annuity, when you add Tier 1 and Tier ll you get per month $43. So, for example, a retired railroad employee drawing an annuity of $3500 per month goes from $148.50 to $158.50 per month. Therefore, the retiree drawing an annuity of $3500 per will get an extra $150.50 increase but pay out an extra $10 for Medicare Part B. 

Remember if you ever have questions as a NARVRE member we are available to you. You will find a frequently asked questions section on our website, or you can call us if you did not see what you were looking for. If you are not yet a member, we urge you to join us today! We stay on top of all news concerning your railroad retirement benefits and we will fight to keep your benefits intact. You can join us through Facebook, the website or speak to your area representative. 

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