Most railroad retirement annuities, like social security benefits, will increase in January 2025 based on a rise in the Consumer Price Index (CPI) from the third quarter of 2023 to the corresponding period of the current year. Cost-of-living increases are calculated in both the tier I and tier II portions of a railroad retirement annuity. The tier I portion, like social security benefits, will increase by 2.5 percent, which is the percentage of the CPI rise. The tier II portion will go up by 0.8 percent, which is 32.5 percent of the CPI increase. Vested dual benefit payments and supplemental annuities also paid by the Railroad Retirement Board (RRB) are not adjusted for the CPI change. This follows a 3.2 percent increase in the tier I portion and a 1.0 percent increase in the tier II portion of railroad retirement annuities in January 2024. For more information, please visit the Railroad Retirement Board website.
Meanwhile, railroad retirement annuitants subject to earnings restrictions can earn more in 2025 without having their benefits reduced due to increased limits indexed to average national wage increases. For those under full retirement age throughout 2025, the exempt earnings amount rises to $23,400 from $22,320 in 2024. For beneficiaries attaining full retirement age in 2025, the exempt earnings amount, for the months before the month full retirement age is attained, increases to $62,160 in 2025 from $59,520 in 2024. For those under full retirement age, the earnings deduction is $1 for every $2 of earnings over the exempt amount. For those attaining full retirement age in 2025, the deduction is $1 for every $3 of earnings over the exempt amount in the months before the month in which full retirement age is attained. More specifics are available here on the RRB website.