How Much Is Railroad Retirement Per Month? Tier I, Tier II, and Averages

Railroad retirement pays an average employee annuity of $3,636 per month as of January 2026, and the average combined payment for a retired employee and spouse is $5,249 per month.¹ How much you personally receive per month depends on how many years you worked for the railroad, how much you earned, and the age you start collecting. Career employees with 30 or more years of railroad service averaged $4,310 a month at the close of fiscal year 2023, compared with $1,810 for the average Social Security retirement benefit.²

Average Monthly Amounts by Beneficiary Type

As of January 2026, these are the typical monthly checks the Railroad Retirement Board is paying:

Retired employee, all service levels: $3,636
Retired employee with 30+ years of service (FY 2023): $4,310
Retired employee and spouse combined: $5,249
Aged widow or widower: $2,109¹

Your own annuity is built from two separate pieces, each calculated its own way. The Tier I portion mirrors Social Security. The Tier II portion works like an industry pension available only to railroad workers. Both go into a single monthly payment.

What Determines Your Monthly Amount

Years of Service

You qualify for a railroad retirement annuity with 10 or more years (120 months) of creditable railroad service, or with at least 5 years (60 months) of service after 1995.³ If you fall short, your railroad earnings transfer to Social Security and pay out as a regular Social Security benefit instead.

Reaching 30 years of service is the threshold that pushes your monthly amount well above the overall average. It also unlocks earlier retirement without a Tier II reduction.

Age When You Start

With 30 or more years of service, you can retire as early as age 60 with no age reduction to your Tier II benefit, though your Tier I portion may still be reduced if you retire before full retirement age.⁴ With fewer than 30 years, you can begin a reduced annuity at age 62, and both tiers are cut for each month before full retirement age.

Full retirement age is 67 for workers turning 62 in 2026.⁵ The Tier II reduction runs at 1/180 for each of the first 36 months before full retirement age and 1/240 for each additional month beyond that. Reductions taken this way are permanent.

Your Earnings

Only earnings up to annual caps count toward your benefit. In 2026, the Tier I maximum taxable earnings base is $184,500 and the Tier II maximum is $137,100.⁶ Anything above those amounts does not raise your check.

How Tier I Is Calculated

Tier I is designed to match what Social Security would pay if your railroad work had been Social Security-covered. It combines your railroad earnings with any Social Security-covered wages, then runs them through the Social Security formula.

The calculation takes your 35 highest-earning years, adjusts them for national wage growth, and produces an Average Indexed Monthly Earnings figure. For workers who become eligible in 2026, the monthly benefit pays:

90% of the first $1,286 of average indexed monthly earnings
32% of earnings between $1,286 and $7,749
15% of earnings above $7,749⁷

Tier I gets a full cost-of-living adjustment each January tied to the Consumer Price Index. The 2026 increase was 2.8%.¹

How Tier II Is Calculated

Tier II is the industry pension piece and has no Social Security equivalent. The formula is straightforward: take your average monthly railroad compensation for your highest-earning 60 months, multiply by your total years of creditable railroad service, then multiply by 0.7%.⁸

A worker with 30 years of service and a high-60 average of $5,000 a month would see roughly $1,050 in Tier II ($5,000 × 30 × 0.007). That amount is added to Tier I to produce your monthly annuity. Tier II also receives an annual cost-of-living adjustment, but a smaller one, set at 32.5% of the CPI increase. For January 2026, that came to a 0.9% bump.¹

Monthly Amounts for a Spouse or Survivor

A spouse who has reached qualifying age or cares for a qualifying child gets Tier I equal to 50% of the employee’s Tier I benefit, plus Tier II equal to 45% of the employee’s Tier II.⁹ If the employee’s Tier II is $1,000, the spouse’s Tier II is $450, on top of the spouse’s share of Tier I.

A divorced spouse can qualify if the marriage lasted at least 10 consecutive years before the divorce, the divorced spouse is not currently married, and the employee meets the service requirements.¹⁰

After an employee dies, a surviving spouse generally receives an annuity based on what the employee was receiving or would have been entitled to receive, with a guaranteed minimum tied to what Social Security would have paid.

What Can Reduce Your Monthly Check

Federal Income Tax

Railroad retirement is split into pieces that are taxed differently. The Social Security Equivalent portion of Tier I is taxed the way Social Security is; up to 85% of it may be subject to federal income tax depending on your total income, and it is reported on Form RRB-1099. The non-Social Security Equivalent portion of Tier I and all of Tier II are taxed like a qualified employee pension, with your own contributions recovered tax-free and the rest taxable, reported on Form RRB-1099-R. Supplemental annuities and vested dual benefits are fully taxable.¹¹

Railroad retirement annuities are exempt from state and local income taxes. Federal law prohibits any state, territory, or the District of Columbia from taxing these payments.¹²

Work After Retirement

If you retire before full retirement age and work for a non-railroad employer, the board withholds $1 in benefits for every $2 you earn above $24,480 in 2026. In the year you reach full retirement age, the limit rises to $65,160 and the withholding drops to $1 for every $3 over. After full retirement age, no earnings limit applies.¹³

Work for any railroad employer or railroad labor organization suspends your entire annuity for every month you do that work, regardless of age or earnings. Going back to work for your last non-railroad pre-retirement employer reduces your Tier II and any supplemental annuity by $1 for every $2 earned, up to a 50% cap, at any age.¹⁴ Report new employment promptly to avoid overpayments, which the board recovers from future checks.

A Separate Social Security Benefit

If you qualify for both a railroad retirement annuity and a Social Security benefit based on non-railroad work, your Tier I is reduced dollar-for-dollar by the Social Security payment. Tier II is not affected. In most cases the board issues a single combined payment after the offset, so your total monthly income stays about the same.¹⁵

How to Estimate Your Own Monthly Amount

Your service and earnings history is the raw material for both tier calculations. The board counts a service month as any calendar month in which you received any compensation from a railroad employer; even a single day of work in a month counts as a full service month.¹⁶

Each year the board sends every railroad employee who earned creditable compensation the year before a Form BA-6, Certificate of Service Months and Compensation.¹⁷ The form shows your cumulative service months and the earnings credited to each tier, which is what you need to identify your highest-earning 60 months for Tier II and confirm your service months for Tier I. If anything looks wrong, contact the board with pay stubs or other proof so the record is corrected before you apply.

1
U.S. Railroad Retirement Board. Cost-of-Living Adjustment Will Increase Railroad Retirement Benefits
2
U.S. Railroad Retirement Board. Comparison of Benefits Under Railroad Retirement and Social Security
3
Social Security Administration. Benefits Planner – Railroad Earnings
4
U.S. Railroad Retirement Board. General Conditions for Entitlement to a Railroad Retirement Employee Annuity
5
Social Security Administration. What Is Full Retirement Age
6
U.S. Railroad Retirement Board. Railroad Retirement and Unemployment Insurance Taxes in 2026
7
Social Security Administration. Social Security Benefit Amounts
8
U.S. Railroad Retirement Board. Twenty-Ninth Actuarial Valuation of the Railroad Retirement System
9
eCFR. 20 CFR 226.32 – Spouse Tier II
10
U.S. Railroad Retirement Board. Divorced Spouse Annuity Marriage Requirements
11
Internal Revenue Service. Publication 575 – Pension and Annuity Income
12
Office of the Law Revision Counsel. 45 USC 231m – Assignability; Exemption From Levy
13
Social Security Administration. Exempt Amounts Under the Earnings Test
14
U.S. Railroad Retirement Board. How Work Affects Your Railroad Retirement Benefits
15
U.S. Railroad Retirement Board. Dual Benefit Payments
16
U.S. Railroad Retirement Board. Chapter 01 – Service Months
17
U.S. Railroad Retirement Board. Chapter 04 – Form BA-6, Certificate of Service Months and Compensation